Information Required for Completion of the Practice Inspection Planning Questionnaire
Access to planning questionnaires and "declaration for exemption" forms will be available online on January 31, 2018 for those offices selected for inspection in 2018-2019. The practice inspection forms are web-driven and the submission process is fully electronic; our letter to each selected office includes the link to access the forms.
Note: Access to the planning questionnaire is restricted to the Practice Inspection (PI) Contact (the addressee in the selection letter). In order to change the PI Contact, one of the firm’s designated contacts must log in to the Firm Secure Area and make the appropriate changes to their records. Refer to Frequently Asked Questions (FAQs) for further details, including a definition of who would be one of the firm’s “designated contacts.” We recommend that firms review their PI Contact information and if necessary, update it to ensure that your office’s correspondence from Practice Inspection is appropriately addressed.
Practice inspection covers only engagements for which professional standards are set out in the CPA Canada Handbook – Assurance, i.e. Canadian Standards on Quality Control (CSQC 1), Canadian Auditing Standards and other Canadian standards (e.g. review and compilation engagements), as well as adherence to the CPA Code of Professional Conduct and our Bylaws and Regulations. Offices involved in just the preparation of tax returns per se or the schedules accompanying them (e.g. government-prescribed schedules of income and expenses) would not be subject to inspection. However, if notice to reader communications are prepared in tandem with such returns, the office would be subject to inspection. Engagements to perform bookkeeping/accounting and other management services are not inspected.
Those offices that believe they might be exempt from practice inspection (including a professional corporation whose sole purpose is to hold a member’s interest in another public accounting practice that is otherwise subject to practice inspection) should refer to our FAQs for further information. If there is still uncertainty with respect to whether a particular office is subject to inspection after receipt of a selection letter, please submit your specific questions by email using the subject line “Questions re: exemption from inspection.” All questions must be submitted in writing and all responses will be provided in writing.
Completing Your Planning Questionnaire
Offices are selected for inspection based upon a three-year, risk-adjusted cycle. If you expect to be selected in 2018 based on the communication received at the conclusion of your most recent inspection, we encourage you to gather the following information that you will require for completion of the planning questionnaire:
- Number of people designated as engagement partners that are responsible for audit, review, and compilation engagements. Please refer to FAQs for the definition of an engagement partner.
- Number of CPA staff members, registered students, and other staff members employed by your firm.
- Dates not available for inspection between May 22, 2018 to February 28, 2019, up to a maximum of eight (8) weeks. Please include any non-statutory religious holidays or peak workload periods within this eight-week exclusion period.
- Total number of audit, review and compilation engagements performed by the office, and the estimated total chargeable hours for each type of engagement.
- Approximate percentage of files that are electronic (i.e., “paperless”) and the software used.
- Number of client files/financial statements prepared in French, and the industry sectors of such clients.
- Number of non-public company financial statements prepared under International Financial Reporting Standards (IFRS), and the industry sector.
- Whether there are any CPAs or assurance engagements in your firm that are subject to investigation by the Professional Conduct Committee.
- Whether your firm has performed assurance engagements for clients with outstanding fees from the prior year, or clients obtained through a tendering process.
- Information about your firm’s quality control policies and procedures:
- When the quality assurance manual was last updated.
- When the last annual and cyclical monitoring had been completed (refer to FAQs for more guidance).
- Who performed the cyclical monitoring (internal/external to practice, name of monitor, level of experience).
- If your firm is a registrant with the Canadian Public Accountability Board (CPAB):
- Number of clients (and industry sector) overseen by a securities regulator.
- Date of most recent CPAB review (if applicable).
If your firm consists of less than 20 assurance engagements, OR only compilation engagements, you will be asked to submit a client listing (the Planning Questionnaires for such inspections incorporate a client listing template) with the following information:
- Dates not available for inspection between May 22, 2018 to February 28, 2019, up to a maximum of eight (8) weeks. (Please include any non-statutory religious holidays or peak workload periods within this eight-week exclusion period.)
- Engagement partner for each client.
- Industry/business sector and number of chargeable assurance/compilation hours for each client.
- Most recently completed year-end date.
- Whether the working papers and/or financial statements are prepared in French.
- Whether the working papers are stored electronically and the software being used.
- Whether the financial statements have been prepared under either the IFRS or PSAB financial reporting frameworks.
- The five largest compilation engagements per partner, and the total hours for all other compilations.
- For compilation engagement only practices, the ten largest compilation engagements and the total for all others.