OCAQ - General Program of Inspection

General Program of Inspection

Approved by the Bureau of the Ordre des comptables agréés du Québec on February 7, 2008

1. General
2. Inspection cycles
3. Notice of inspection
4. Inspection evaluation criteria
5. Procedures respecting inspection, file evaluation and recommendations for a period of refresher training
6. Sanctions
7. Content of the professional inspection file

In accordance with the Professional Code, a Professional Inspection Committee has been appointed by the Bureau of the Ordre to supervise the practice of the profession with its primary purpose being the protection of the public.

Professional inspections are performed pursuant to the Regulation respecting the Professional Inspection Committee and in accordance with the general program of inspection approved by the Bureau of the Ordre. The Committee has developed the following program bearing in mind the Ordre’s primary mission of protecting the public. For the time being, the Committee intends to focus primarily on the inspection of members practicing public accounting within the meaning of the Code of Ethics of Chartered Accountants.

However, the Committee recognizes that the protection of the public is not the sole purview of members practicing public accounting. All members, regardless of their field of practice, are required to comply with the profession’s standards. Accordingly, monitoring compliance with the Regulation respecting mandatory continuing education is one way to ensure that all active members keep their knowledge and professional skills up to date. In addition, the Committee carries out a number of inspections in certain areas of professional activity such as valuation. Eventually, the Committee will look into the possibility of setting more specific inspection criteria for members practicing professional activities other than public accounting.

1. General

1.1.	For the purpose of the general program of inspection, the following terms mean:
	1.1.1	"Bureau": the Bureau of the Ordre des comptables agréés du Québec;
	1.1.2	"Committee": the Professional Inspection Committee;
	1.1.3	"Inspection Department": the staff of the Professional Inspection Department of the Ordre des comptables agréés du Québec;
	1.1.4.	"practice of public accountancy": the offering of services to the public to improve the quality of financial, accounting or decision-making information, or the context in which it is provided, for decision making. Without limiting the generality of the foregoing, such services shall include:
		accounting services, insofar as they involve synthesis, analysis, advice, counsel or interpretation, and compilation engagements, but excluding record keeping; assurance services including audit and review engagements, derivative reports and specified auditing procedures engagements within the meaning of the Canadian Institute of Chartered Accountants Handbook (CICA Handbook); taxation services, insofar as they involve advice, counsel or interpretation, including the preparation of tax returns and other statutory documents if required or connected with one of the public accounting services offered, but excluding personal income tax returns; investigative and forensic accounting services, including financial investigation and financial litigation support; financial planning services.
	1.1.5.	"Office": any unit located in a place of business and made up of one or more chartered accountants offering their services to the public as chartered accountants;
	1.1.6.	"Partner/shareholder": partners or shareholders, sole practitioners, and such chartered accountant employees of an office whom the Committee may deem to have partner responsibility;
	1.1.7.	"Period of refresher training": successful completion of one or more of the following activities:
		1.1.7.1.	studies or courses within the framework of the Ordre’s Professional Education Program;
		1.1.7.2.	professional development courses;
		1.1.7.3.	development of control policies and procedures to correct weaknesses for the purpose of providing reasonable assurance that professional standards will be met;
		1.1.7.4.	submission of files to the Inspection Department or to a person authorized by the Professional Inspection Committee for purposes of quality control;
		1.1.7.5.	performance of work related to the practice of the profession, under the direction of a member designated for such purpose by the Bureau.
1.2.	A Committee member or inspector who is or would be perceived to be in a conflict of interest position shall withdraw from any Committee deliberations and actions.

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2. Inspection cycles

2.1.	An office shall be inspected using a risk-adjusted cycle approach.
2.2.	Risk factors are determined by the Committee.
2.3.	All offices shall fill out a questionnaire each year for purposes of determining their inspection cycle based on risk factors.
2.4.	An office shall be inspected no less than once every four years.
2.5	All new offices shall be inspected in their first year.
2.6.	An office that has been found to present certain risks according to the risk factors established in section 2.2 shall be inspected on a minimum three-year cycle or a shorter inspection cycle.
2.7.	An office within which chartered accountants audit companies that make a distribution of their securities to the public in accordance with securities legislation applicable in Quebec or outside Quebec shall be inspected no less than once every three years.

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3. Notice of inspection

3.1.	The Committee Secretary shall notify by registered mail the office to be inspected, at least fifteen (15) days prior to the anticipated date of inspection. The notice will include information on the inspection fees.
3.2.	An office may request, in exceptional circumstances and under the terms and conditions established by the Inspection Department, that the inspection be delayed for a reasonable period of time not to exceed two months from the anticipated date.
3.3.	Any undue refusal or delay by the office to submit to the inspection may constitute a hindrance under section 114 of the Professional Code.

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4. Inspection evaluation criteria

4.1.	Professional assurance standards, general standards of quality control for firms performing assurance engagements, practice standards for investigative and forensic accounting engagements together with the other standards, rules and guidelines, are those set out in the Canadian Institute of Chartered Accountants Handbook (CICA) or that reflect current scientific knowledge. Any engagement entrusted shall be documented in accordance with the recommendations set out in the CICA Handbook, or, where applicable, in accordance with the law, regulations or current scientific knowledge.
4.2.	Generally accepted accounting principles are those set out in the CICA Handbook or any other accounting principles that should be applied in accordance with the law, regulations or current scientific knowledge.

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5. Procedures respecting inspection, file evaluation and recommendations for a period of refresher training

5.1.	Inspection
	5.1.1.	Each office inspected will be charged an inspection fee for each inspection as established by the Bureau;
	5.1.2.	A confidential information questionnaire shall be completed and returned to the Inspection Department thirty (30) days before the anticipated date of inspection;
	5.1.3.	In addition to the confidential information questionnaire, all other questionnaires and documents required for inspection purposes shall also be completed and returned to the Inspection Department thirty (30) days before the anticipated date of inspection. However, the Department may allow these questionnaires and documents to be returned within a shorter timeframe;
	5.1.4.	After reviewing the documents and questionnaires provided and considering the other information obtained, the inspector shall complete one or several questionnaires in the course of the inspection to assess whether the office has complied with the professional standards and current scientific knowledge;
	5.1.5.	An office shall be inspected as a single unit if there exists a system of quality control that will ensure uniformity of practice within the office; otherwise each practicing unit shall be inspected individually;
	5.1.6.	At least one partner or shareholder with voting rights practicing at the place of business being inspected shall be available during the inspection. The Inspection Department can, however, require the presence of another person practicing within the office;
	5.1.7.	Upon completion of the inspection, the inspector shall submit to the Inspection Department the completed documents and questionnaires as well as any written report of the findings yielded by the inspection. Once these documents have been filed, any report submitted to the Inspection Department shall be forwarded to the office;
	5.1.8.	Upon receiving an inspection report, the inspected office may send a comment letter that will be included in the inspection file. The letter shall be reviewed and evaluated in accordance with the process established below.
5.2.	Review and evaluation of the inspection file
	5.2.1.	Prior to each Committee meeting, the Inspection Department shall proceed with the preliminary evaluation of each file and classify each office in one of the following categories:
		5.2.1.1.	approved as having met the standards of inspection;
		5.2.1.2.	provisionally approved as having met the standards of inspection for a period of twelve months, after which the office will be reinspected;
		5.2.1.3.	not approved as having met the standards of inspection.
	5.2.2.	Files classified in the category of offices approved as having met the standards of inspection shall be reviewed by at least one Committee member:
		5.2.2.1.	if the Committee member agrees with the preliminary evaluation of the Inspection Department, this assessment shall be maintained with no further evaluation;
		5.2.2.2.	if the Committee member disagrees with the preliminary evaluation of the Inspection Department, the file shall be further evaluated by at least one other Committee member. The final assessment of the office shall be based on the opinion of the majority of members who evaluated the file.
	5.2.3.	All other files shall be reviewed by at least two Committee members:
		5.2.3.1.	if the two Committee members agree with the preliminary evaluation of the Inspection Department, this assessment shall be submitted to the full Committee for action;
		5.2.3.2.	if one of the Committee member disagrees with the preliminary evaluation of the Inspection Department, the file shall be further evaluated by at least one other Committee member. The recommendation of the majority of members who evaluated the file shall be submitted to the full Committee for action;
		5.2.3.3.	if the two Committee members do not agree with one another, the file shall be further evaluated by at least one other Committee member. The recommendation of the majority of members who evaluated the file shall be submitted to the full Committee for action.
	5.2.4.	The review and evaluation of an inspection file by Committee members shall be made without the identity of either the office or its clients having been disclosed.
5.3.	Recommendation for a period of refresher training and appeal procedures
	5.3.1.	Members who have been notified by letter that the Committee will recommend to the Bureau that they must follow a period of refresher training with or without the limitation of their right to practice may, under the terms and conditions set out in the letter, request in writing to be heard by the Committee or by a small group of Committee members. Their response must outline the reasons for which a hearing is requested and shall be sent by registered mail to the offices of the Ordre.
	5.3.2.	In the case where a member requests to be heard, the Committee shall notify the member of the date and time of the hearing at which the evaluation of the member’s office will be discussed.
	5.3.3.	The Committee shall advise the members of its decision.
	5.3.4.	The Committee shall submit all recommendations for a period of refresher training to the Bureau for action.

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6. Sanctions

6.1.	If an office does not meet the standards of inspection, the Committee shall recommend to the Bureau either one or both of the following sanctions with respect to the members of the office that it designates:
	6.1.1.	a period of refresher training with or without limitation of the right to practice and the office is to be reinspected within a reasonable period of time following the period of refresher training. Should a member fail to successfully complete the training period within the prescribed time, the training period will automatically be extended for an additional period equal to the preceding, subject to new conditions that may be imposed by the Bureau;
	6.1.2.	a complaint be lodged with the Syndic of the Ordre for appropriate action.
6.2.	If an office still does not meet the standards of inspection on a reinspection, the Committee may recommend to the Bureau a second period of refresher training with or without the limitation of the right to practice. The second period of refresher training shall also be followed by a third inspection within a reasonable period of time following the period of refresher training.
6.3.	If an office still does not meet the standards of inspection on a third inspection, the Committee shall recommend to the Bureau a period of refresher training and the limitation of the right to practice. The office shall be inspected a fourth time within a reasonable period of time following the period of refresher training.
6.4.	If a member refuses to comply, in whole or in part, with the particulars of the period of refresher training, the Committee shall recommend to the Bureau that the file be submitted to the Syndic of the Ordre for appropriate action.
6.5.	All decisions of the Bureau shall be sent without delay to the office.
6.6.	All letters dealing with the results of inspection shall be sent by registered mail.

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7. Content of the professional inspection file

7.1.	An inspection file should include:
	7.1.1.	all questionnaires duly completed by the office or by the inspector;
	7.1.2.	all correspondence dealing with the inspection;
	7.1.3.	a copy of all financial statements examined during the inspection; however, the anonymity of the clients and of the office will be maintained;
	7.1.4.	inspector reports and reviewer evaluations.
7.2.	Once the evaluations have been ratified, the inspection questionnaires completed by the inspector and the financial statements examined during the inspection shall be destroyed.
7.3.	Any partner/shareholder inspected may have access to its professional inspection file at the offices of the Ordre.