Code of ethics of chartered accountants, R.Q. c. C-48, r.2

Replaced, O.C. 58-2003, 2003 G.O. 2, 861; eff. 2003-02-20; see c. C-48, r. 2.01

1.01.   In this Regulation, unless the context indicates otherwise, the following words and expressions mean:

  (a)      «Order»: the Ordre des comptable agréés du Québec;

  (b)      «firm»: a public accountant practising alone, with or without employed members, or a partnership of public accountants;

  (c)      revoked.

  (d)      «practice of public accountancy»: the offering of services to the public in the investigation or audit of records leading to the preparation of or reporting on financial statements and the provision of services pertaining thereto. Without limiting the generality of the foregoing, such services shall include for purposes of this Regulation:

  (i)    accounting, insofar as it involves analysis, interpretation and advice in an expert capacity, systems and procedures and the preparation of financial statements, but excluding record keeping;

  (ii)    auditing;

  (iii)    taxation services;

  (e)      «related functions»: the following functions, when offered to the public:

  (i)    management consulting, insofar as it involves investigating and identifying management and business problems related to the policy, technical, organizational, operational, financial or administrative aspects of organizations and recommending appropriate solutions;

  (ii)    receivership or trusteeship in bankruptcy and administration of bankrupt companies and estates;

  (iii)    data processing, including manual record keeping, mechanical and electronic data processing;

  (iv)    administratorship, insofar as it involves the management of affairs on behalf on third parties;

  (v)    systems counselling, insofar as it involves EDP counselling and programming computer systems;

  (vi)    business brokerage, negotiating and advising on the sale, acquisition or merger of business organisations;

  (vii)    estate administration and settlement;

  (viii)    estate planning;

  (ix)    financial counselling;

  (x)    insurance counselling;

  (xi)    valuation;

  (f)      «member»: a member of the Order;

  (g)      «practising member»: a member engaged in anyone or more of the professional functions or activities listed in paragraph d;

  (h)      «public accountant»: any person who is entitled to practise public accountancy as defined in the Chartered Accountants Act (R.S.Q., c. C-48) and who carries on the practice of public accountancy.

  (i)      «professional colleague»: a member of the Canadian Institute of Chartered Accountants;

  (j)      «provincial institute»: an institute of chartered accountants incorporated in any province of Canada other than Québec, in any Canadian territory, or in Bermuda;

  (k)      «student»: a duly registered student-in-accounts;

  (l)      «immediate family»: the spouse of a person, and any relative of that person or of his or her spouse, provided they have the same home as that person;

  (m)      «associate»: in relation to a corporate client:

  (i)    any affiliate thereof, within the meaning given to the term «affiliate» in the Canada Business Corporations Act (R.S.C., 1985, c. C-44), except that the meaning is extended to include any unincorporated body;

  (ii)    any «investor» as that term is used in the Handbook issued by the Canadian Institute of Chartered Accountants, Toronto, where the investor uses the equity method on the bases provided in the Handbook to account for its investment in the corporate client and where the amounts relating to the corporate client reflected in the financial statements of the investor constitute more than 5 % of total assets or more than 5 % of gross revenues of the investors;

  (iii)    any «investee» as the term is used in the Handbook issued by the Canadian Institute of Chartered Accountants, where the corporate client is an investor and uses the equity method and where the materiality criteria outlined in subparagraph ii are met;

  (n)      «associate»: any person with whom a member is connected as partner, employer or employee for the practice of public accountancy or a related function, including the immediate family of such member or such person;

  (o)      «separate organization»; an organization engaged in the practice of a related function as a partnership or a corporation separate from a firm of public accountants, or whose administrative or operational structure is separate from that of the firm of public accountants, or whose name is different from that of the firm of public accountants but whose owner or one of the partners, directors, shareholders or employees is a practitioner within the firm of public accountants.

1.02.   The Interpretation Act (R.S.Q., c. I-16) applies to this Regulation.

1.03.   A member shall make sure that others, whether employees or partners, who are associated with him in the public practice of the functions covered therein, comply with this Regulation. In a partnership, each member who is a partner is responsible for compliance with this Regulation by the partnership.

1.04.   A member must not permit others to carry out on his behalf acts which, if he carried them out himself, would place him in violation of this Regulation.

1.05.   A member engaged in the practice of a related function, and who is not also engaged in the practice of public accountancy, may, in carrying on his practice, conduct his affairs or his organization's affairs free of the constraints imposed by sections 2.01.02, 2.01.03, 2.01.05, 2.01.06, 3.02.20, 3.02.22, 4.02 and 5.01.

2.01.01.   Each office in Québec of any member or partnership of members engaged in the practice of public accountancy shall be under the personal charge and management of a member.

If the office is part of a firm engaged in the practice of public accountancy and composed of one or more members sharing propriety interest with one or more registered public accountants, it shall be under the personal charge and management of a member or registered public accountant.

2.01.02.   A practising member shall not hold out or imply that he has an office in any place where he is in fact only represented by another public accountant who is neither his partner nor his employee and, conversely, a practitioner who only so represents a public accountant shall not hold out or imply that he maintains an office for such public accountant.

2.01.03.   A member shall not be an employee, shareholder or director of any incorporated company engaged in Canada in the practice of public accountancy unless such company is engaged in the practice of public accountancy in a province other than Québec in accordance with the regulations of the provincial institute.

2.01.04.   Members engaged in the practice of public accountancy may operate an organization separate from such public accountancy practice for the practice of the following related functions only:

  (a)      management consulting;

  (b)      receivership or trusteeship in bankruptcy;

  (c)      electronic data processing;

  (d)      administratorship;

  (e)      systems counselling.

They may do so either as a proprietor, a partner or as a director, officer or shareholder of a corporation and may associate with non-members for this purpose. However, except in the case of electronic data processing, such association with non-members must be restricted to non-members who are or were actively engaged in the operation of the separate organization.

2.01.05.   Before commencing an assignment in any of the related functions for a client of another public accountant who is the duly appointed auditor, a member engaged in the practice of public accountancy who is associated with a separate organization carrying on the practice of any of the related functions shall first notify, or shall ensure that the organization notifies, such public accountant of the assignment.

2.01.06.   A member engaged in the practice of public accountancy who is a principal, partner, director, officer or shareholder of a separate organization carrying on the practice of one or more of the related functions mentioned in section 2.01.04 shall ensure that such organization abides by this Regulation as if it were a firm of chartered accountants engaged in the practice of public accountancy and any member employed by such separate organization shall be accountable for any infraction of this Regulation to which he is a party.

2.01.07.   No member shall be associated in any manner with a firm using the designation of Chartered Accountant in Québec unless:

  (a)      at least one associate is a member of the Order;

  (b)      every associate residing in Québec is a member of the Order;

  (c)      every associate is a member of the Canadian Institute of Chartered Accountants.

2.02.01.   Shall be guilty of an act derogatory to the dignity of the profession, in addition to those mentioned in sections 57 and 58 of the Professional Code (R.S.Q., c. C-26), any member of the Order who:

  (a)      is found guilty by a final judgment of a court of competent jurisdiction of an offence against any tax act or security act in Canada or elsewhere;

  (b)      makes an assignment of his property or against whom a receiving order, as that term is used in the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) is made by a final judgment of a court of competent jurisdiction;

  (c)      having made an assignment of his property or having had a receiving order, as that term is used in the Bankruptcy and Insolvency Act, made against him by a final judgment of a court of competent jurisdiction, fails to inform the Order without delay;

  (d)      fails to inform the Order that he has reasons to believe that a member practises his profession in a manner which is detrimental to his clients, his employer or the public or violates this Code of ethics, the Professional Code, the Chartered Accountants Act or the Order's regulations, or that he is incompetent;

  (e)      communicates with the plaintiff without the prior written permission of the syndic or his assistant whenever he is informed by the syndic or his assistant that an enquiry into his professional conduct or competence has been initiated by either of them or whenever he has been served notice of a complaint under section 132 of the Professional Code.

3.01.01.   Before accepting an engagement, a member shall consider the extent of his proficiency, knowledge and the means at his disposal. He shall not, in particular, undertake work for which he is not sufficiently prepared without obtaining the necessary assistance.

3.01.02.   A member shall abstain from practising in conditions likely to impair the quality of his services and the dignity of the profession.

3.01.03.   A member shall abstain from intervening in the personal affairs of his client on matters outside the scope of his engagement.

3.01.04.   A member shall fulfill his engagements in keeping with the current professional accounting and auditing standards set out in the recommendations included in the Handbook issued by the Canadian Institute of Chartered Accountants and current accounting data.

Accounting practices that differ from those set out in the Handbook issued by the Canadian Institute of Chartered Accountants should only be used provided that there is substantial authoritative support to alternative treatment and that the departure from the recommendations is disclosed.

When a member is required by statute or regulation to comply with a standard which departs from the standards of the profession, he must make an appropriate qualification.

Notwithstanding the third paragraph, in the case of financial reports of banks, the auditor may omit a reference to generally accepted accounting principles and a qualification in his report if, in instances where the Handbook issued by the Canadian Institute of Chartered Accountants is silent as to such financial institutions, accounting practices which are different from those that would be considered normal for ordinary commercial and industrial enterprises are prescribed or permitted by law or regulation.

3.01.05.   A member shall promptly return to a client or, if so instructed by such client, to his successor the records and documents belonging to the client, whether or not his fees have been paid.

3.01.06.   In the practice of his profession, a member must assume full personal civil responsibility within the limits of his engagement. He is forbidden to include in a contract for professional services any clause to the effect of directly or indirectly, fully or partially, excluding such responsibility.

3.01.07.   A member shall not prevent a client from consulting a professional colleague, a member of another professional corporation or another competent person.

3.02.01.   A member shall perform his professional duties with integrity, objectivity, independence and due care.

3.02.02.   A member shall avoid any misrepresentation with respect to his level of competence or the efficiency of his own services or the services generally performed by members of his profession. If the interest of a client so requires, he shall, with the authorization of such client, consult a professional colleague, a member of another professional corporation or another competent person, or refer such client to one of these persons.

3.02.03.   A member shall inform a client, as soon as possible, of the extent and terms and conditions of the engagement entrusted to him by such client.

3.02.04.   A member shall place his personal interest second to that of his client.

3.02.05.   A member who is called upon to express an opinion on financial statements or on financial or other information shall hold himself free of any influence, interest or relationship which, in respect to his engagement, may impair or be perceived as impairing his professional judgment or objectivity.

3.02.06.   In particular, shall constitute an infraction of section 3.02.05 the fact for a member:

  (a)      to accept an engagement to express an opinion on the financial statements of a client:

  (i)    where, in the case of a corporate client, he or any of his partners or his or their immediate families, directly or indirectly holds any investment in:

  (A)    shares, bonds or debentures of the corporation or any associate thereof;

  (B)    mortgages of the corporation or any associate thereof;

  (C)    advances to the corporation or any associate thereof;

  (ii)    where, in the case of a client who is not a corporation, he or any of his partners or his or their immediate families, directly or indirectly, holds any investment similar to those listed in subparagraph i in the organization or any affiliate thereof;

  (iii)    where he or any of his partners is a director, officer or employee of the client organization or of any associate thereof, or where a member of his or their immediate families is a director or officer of the client organization or of any associate thereof;

  (b)      to be, or to have a partner who is, a member of a private mutual fund or of an investment club which holds any investments, set out in subparagraph i of paragraph a, of a client of the member or of the membership. However, a member would not be in violation of the above rule if he or his partners invested in a public mutual fund not audited by the member or his partners, which held investments of a client of the member or his partners, nor would a member be in violation if he held qualifying shares in a social club of which he were the auditor where the shareholding is a prerequisite of membership;

  (c)      to accept an engagement to report on the financial statements of a not-for-profit corporation or organization in which he or any of his partners is an officer or director or holds any other position where he has the right or responsibility to make decisions affecting the management of the corporation or organization;

  (d)      to be the auditor:

  (i)    of a trust or estate in which he or any of his partners, or his or their immediate families, holds a position as executor or trustee;

  (ii)    of an organization in which such a trust or estate holds a material interest;

  (iii)    of a pension plan or a profit-sharing plan in which he or any of his partner, or his or their immediate families, holds a position as trustee;

  (iv)    of an organization in which a private charitable foundation holds an interest, where he or any of his partners, or his or their immediate families, holds a position as trustee in such charitable foundation.

3.02.07.   Notwithstanding sections 3.02.05 and 3.02.06, shall not constitute an infraction the fact for a member:

  (a)      to accept an engagement to report on the financial statements of a chartered bank, trust company, finance or acceptance company, savings and loan institution, cooperative, caisse populaire or similar institution, from or in which he or any of his partners, or his or their immediate families, borrowed or deposited funds in the normal course of business, provided that the amount borrowed or deposited is reasonable in relationship to the institution's assets to the borrower's or depositor's income and his net worth and that the operation is of the sort that would be made with other customers of the institution in the normal course of business;

  (b)      to accept an engagement to report on the financial statements of a client with whom he or any of his partners, or his or their immediate families, carried out a commercial transaction, provided that the transaction was on the same terms and conditions as are normally allowed to other customers, in particular with respect to terms of payment;

  (c)      to hold a share in a savings and loan institution, cooperative or caisse populaire which is audited by his firm, provided that the member does not exercise his right to vote at general meetings.

3.02.08.   Generally, a member is not able to give objective advice to 2 or more clients who are parties to the same transaction. In instances where a member feels that he is able to do so, he must inform each client in writing that he has been engaged by other parties and specify the nature of his engagement.

3.02.09.   A member shall not accept nor let an associate accept an appointment as trustee in bankruptcy, or in a proposal, for a client while holding, or within 2 years of having held, the position of auditor of that client. Furthermore, where a member or his associate has acted for a client in any capacity other than as auditor, the member should accept an appointment as trustee only when he can act with objectivity.

3.02.10.   Before accepting or letting an associate accept an assignment under the Bankruptcy and Insolvency Act, the member should be satisfied that his or his associates' relationship with any other clients having an interest in the bankrupt estate is not such as to impair his objectivity.

3.02.11.   If a member, or his associate, who is acting or who has acted as auditor, public accountant or business advisor for an organization is asked by the shareholders or owners of such organization to act as administrator/manager or liquidator, he may not accept the appointment if he finds himself in a conflict of interest or in a situation such that he would lose his professional independence.

In no case shall a member accept to act as administrator/manager, mandatary, receiver or liquidator for a secured creditor of an organization for which he or his associate is acting as auditor or public accountant for the said organization or whose mandate as auditor or public accountant of the said organization has ended less than 2 years before. Anyone who accepts such a mandate may not accept an auditing or public accounting mandate with respect to the same organization for any year during which he is acting or has acted as administrator/manager, mandatary, receiver or liquidator.

3.02.12.   Whether his duties and obligations be towards the public, a client or an employer, a member shall not, under any circumstances, even when subject to a disclaimer of responsibility, sign, prepare, produce or even associate himself with:

  (a)      any letter, report, statement, representation or financial statement which he knows, or should know, is false or misleading;

  (b)      any financial statement which he knows, or should know, has not been prepared in accordance with this Regulation.

3.02.13.   In expressing an opinion or in issuing a review engagement report on financial statements examined or reviewed by him, a member shall not:

  (a)      fail to reveal any material fact known to him which is not disclosed in the financial statements, the omission of which renders the financial statements misleading; nor

  (b)      fail to report any material misstatement known to him to be contained in the financial statements.

3.02.14.   Revoked.

3.02.15.   Revoked.

3.02.16.   Revoked.

3.02.17.   Revoked.

3.02.18.   A member shall inform his client of any interests, any business connections and any affiliations of which the client should normally be informed but this does not necessarily include disclosure of professional services he may be rendering or proposing to render to other clients.

3.02.19.   A member shall not, in connection with any transaction involving a client or an employer, hold, receive, bargain for, become entitled to or acquire any fee, remuneration or benefit without the client's or employer's knowledge and consent.

3.02.20.   Other than in relation to the sale and purchase of an accounting practice, a member engaged in the practice of public accountancy shall not directly or indirectly pay to any person who is not in the practice of public accountancy a commission or other compensation to obtain a client, nor shall he accept directly or indirectly from any person who is not in the practice of public accountancy a commission or other compensation for a referral to a client of products or services.

3.02.21.   A member who receives, handles or holds money, funds or other property as a trustee, guardian, administrator/manager, mandatary or liquidator shall maintain such records as are necessary to account properly for his management or mandate.

The money, funds or other property thus received handled or held shall be kept in a separate trust bank account or accounts.

Except when specifically authorized in writing by a client, a member shall not use, transfer, withdraw or otherwise employ such money, funds or property as payment for his fees or for any other purpose not provided for in his mandate.

3.02.22.   A member engaged in the practice of public accountancy shall not offer or agree to render any professional service for a fee contingent on the results of such service, nor shall he renounce his fees in advance except for services of a charitable, benevolent or similar nature.

3.02.23.   A member shall respect the right of his client, or of a representative of his client authorized to that effect, to take cognizance and obtain copy of any documents concerning the client in any file developed in connection with him in the course of an engagement. Particularly, a member shall, on request, hand to his client, or to a representative of his client authorized to that effect, copy of any documents which are part of the accounting records of his client.

3.02.24.   A member shall handle with reasonable care any property entrusted to him by a client.

3.02.25.   A member is bound to professional secrecy and he may not disclose confidential information revealed to him by reason of his position or profession, unless he is authorized to do so by the person who confided such information to him or by an express provision of law.

3.02.26.   A member shall not make use of confidential information in a manner which may be prejudicial to a client or with a view to obtaining directly or indirectly a benefit for himself or for another person.

3.02.27.   A member who is called upon to conduct a review of financial statements or financial or other information shall hold himself free of any influence, interest or relationship which, in respect to his engagement, may impair or be perceived as impairing his professional judgment or objectivity.

The provisions of sections 3.02.06 and 3.02.07 apply to that member mutatis mutandis.

3.03.01.   In the practice of his profession, a member shall display reasonable availability and diligence.

3.03.02.   A member shall render a report to his client when the client so requests.

3.03.03.   Unless for good and sufficient reason, a member may not cease to act on behalf of a client. The following shall, in particular, constitute sound and reasonable reasons:

  (a)      loss of the client's confidence;

  (b)      the fact that the member is placed in a situation of conflict of interests or in circumstances where his professional independence could be questioned;

  (c)      inducement by the client to perform illegal, unjust or fraudulent acts.

3.03.04.   Before ceasing to act on behalf of a client, a member shall give such client reasonable advance notice of his intent and shall make sure that his withdrawal will not prejudice such client.

3.04.01.   A member shall charge just and reasonable fees. In determining his fees, he shall in particular take the following factors into account:

  (a)      the time devoted to the performance of the professional service;

  (b)      the difficulty and importance of such service;

  (c)      the performance of unusual services or of services requiring exceptional competence or celerity.

3.04.02.   A member shall provide a client with all the explanations necessary for comprehension of his account for fees.

3.04.03.   A member shall not require full advance payment for his services.

3.04.04.   A member shall make sure that his client is informed of the approximate and foreseeable cost of his services.

4.01.   A member shall reply without undue delay to any letter requiring a response which has been addressed to him by the executive director, the syndic, investigators or members of the professional inspection committee and relates to the performance of their duties.

4.02.   Before opening any new place of business for the practice of public accountancy, members must notify the Order in writing and indicate the address of such office and the names of the members who will practise at such office.

A member shall notify the Secretary of the Order of any change with respect to his status as a member, his home address or work address or his relevant telephone numbers.

A post office box is not considered to be an address for the purposes of this section.

4.03.   A member engaged in the practice of public accountancy shall not adopt any method of obtaining or attracting clients which tends to lower the standard of dignity of the profession and, in particular, he shall not solicit anyone pressingly or repeatedly to retain his professional services.

5.01.   A member shall not directly or indirectly solicit an engagement in public accountancy or a related function from a client of a public accountant.

A member shall not solicit the clientele of a deceased public accountant for 90 days after the death of such public accountant.

5.02.   Before accepting an appointment with respect to any function relating to the practice of public accountancy where he is replacing another public accountant, a member shall first communicate with such public accountant and enquire whether there are any circumstances he should take into account which might influence his decision whether or not to accept the appointment. Such public accountant shall reply within a reasonable period of time.

5.03.   A member who accepts an appointment in public accountancy or a related function jointly with another member or with a public accountant shall accept joint and several responsibility for any portion of the work to be performed by either; no member shall proceed in any matter within the terms of such joint appointment without due notice to the other accountant.

5.04.   When not limited or restricted in writing by the terms of his engagement, a member engaged in the practice of public accountancy shall, before commencing any special assignment for a client of another public accountant who is the duly appointed auditor, first notify such accountant of the assignment.

5.05.   A member shall not abuse the good faith of a professional colleague or be guilty of breach of trust or disloyal practices towards him. In particular:

  (a)      a member shall not claim credit for work attributable to a professional colleague; this shall not preclude a member from relying on the opinion of other auditors, without naming such auditors, in the audit of consolidated financial statements;

  (b)      a member who accepts a special assignment, whether by referral or otherwise, from a client of a public accountant who is continuing in his relationship with the client shall not, without valid reason, take any action which would tend to impair the position of the other public accountant in his ongoing work with his client;

  (c)      a member who receives an engagement for services by referral from a public accountant shall not provide or offer to provide any different services to the referring accountant's client without the consent of the referring accountant; on the other hand, the referring accountant shall not unreasonably withhold such consent;

  (d)      a member, unless limited or restricted in writing in special circumstances by the terms of his engagement, shall first submit any proposed criticism of the work of a professional colleague or other public accountant to such professional colleague or public accountant so that any such criticism take into account all the available information, and be made in a spirit of prudence.

5.06.   A member shall inform a student applying for employment whether he or his firm or office is approved for the training of students.

6.01.   Omitted.