Providing Volunteer Services to Not-for-Profit Organizations (NPOs)

 

Many CGA members and students volunteer their services to the community. This is encouraged by the CGA-BC Association and helps to promote the CGA brand. This section of our website is intended to provide information to members and students on providing volunteer services to non-for-profit organizations (NPOs). The provision of some volunteer services may either require registration in public practice (for members) or be entirely prohibited (for students) if the services are considered to be the provision of public accounting services. It is therefore critical that members and students determine whether the Code of Ethical Principles and Rules of Conduct (the Code) and/or the Public Practice Policies of CGA-BC address the specific volunteer opportunity being considered. Please see below for frequently asked questions (FAQs) on providing volunteer services to NPOs and information on common types of volunteer services.

 

FAQs on Providing Volunteer Services to Not-For-Profit Organization (NPOs)

 

1. What types of volunteer services are of professional concern for CGA members and students? 
2. How is the practice of public accounting defined? 
3. Is a CGA member who is providing volunteer services to an NPO required to register in public practice? 
4. Can a Retired Member provide volunteer services to Not for Profit organizations?  
5. What exemptions are granted to members registering in public practice to provide services as a volunteer? 
6. What requirements must be met by members registering in public practice to provide services as a volunteer? 
7. Once a member is registered in public practice to provide volunteer services to one NPO, can that member provide volunteer services to other NPOs? 
8. What factors should be considered by CGA members and students before accepting a volunteer position? 
9. What sort of liability insurance coverage is recommended when providing volunteer services to an NPO? 
10. Can CGA students provide volunteer services to NPOs? 
11. Can CGA members or students who are providing volunteer services accept an honorarium?  

Common Types of Volunteer Services

 

1. Treasurer 
2. Director or Officer (Non-treasurer) of an NPO 
3. Personal Tax Preparation Provided on a Volunteer Basis 
4. Committee Member of an NPO 
5. Reviewing Financial/Accounting Work of Another Party on a Volunteer Basis 
6. Services Provided to an NPO when not a Board or Committee Member 
7. Condominium Strata Council Member 
8. Public Practitioner Providing Volunteer Services (to Clients and Non-clients) 
9. Government Election Volunteer Positions 
10. Other Types of Volunteer Opportunities 

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FAQs on Providing Volunteer Services to Not-For-Profit Organizations (NPOs) 

1) What types of volunteer services are of professional concern for CGA members and students? 

Volunteer services that include accounting, taxation, statutory filings and/or financial consulting may fall under the definition of the practice of public accounting and therefore require registration in public practice (see below). Please note that the preparation of any financial statement (including a computer-generated financial statement) falls under the definition of the practice of public accounting. Therefore volunteer services to NPOs that include preparing monthly financial statements and/or statutory filings require registration in public practice.

 

2) How is the practice of public accounting defined? 

The practice of public accounting is defined as:

(a) Providing or offering to provide one or more of the following services to the public:

• an assurance engagement
• a specified auditing procedures engagement
• a compilation engagement
• an accounting service insofar as it involves summarization, analysis, advice, counsel or interpretation but excluding an accounting service which is incidental to the provider’s primary occupation which is not public accounting
• advice, counsel or interpretation with respect to taxation matters
• the preparation of a tax return or other statutory filing.

(b) A member who is “employed” in the practice of public accounting is not considered to be “engaged” in the practice of public accounting. This exemption does not apply to employees of firms that are owned, operated or controlled by a non-arms length person or persons, and that are not CGA, CA or CMA firms registered with, and regulated by, their respective associations.

 

 

3) Is a CGA member who is providing volunteer services to an NPO required to register in public practice? 

Although a member may be providing services as a volunteer, a member would still be considered to be engaged in the practice of public accounting for the purposes of Rules R517, R518 and R519 of the Code if the member is providing public practice services to an NPO. A member who is providing public practice services to an NPO on a volunteer (non-remunerative) basis must register in public practice; however, certain exemptions may be granted (see questions 4) and 5) below).

 

 4) Can a Retired Member provide volunteer services to Not for Profit organizations? 

As discussed in 3. above, a member providing public practice services as a volunteer to an NPO must be registered in public practice.  Retired Members cannot register in public practice and, consequently, cannot participate in this type of volunteer service.

 

 5) What exemptions are granted to members registering in public practice to provide services as a volunteer? 

The following exemptions apply when registering in public practice to provide services as a volunteer:

• waiver of the application fee and public practice registration fees
• waiver of the requirement to complete the Case Study, the CICA Handbook Seminar, and the Tax 2 lessons and assignments
• waiver of the requirement to engage a mentor
• waiver of the requirement to subscribe to the CGA-Canada Public Practice Manual, the CICA Handbook-Accounting and the CICA Handbook-Assurance provided that the member has access to these reference sources
• waiver of fee for professional liability insurance
• waiver of fee for a practice review of completed engagements
• waiver of the requirement to attend the Public Practice Seminars that do not specifically relate to the type of engagement the member will be performing.

Please note that should the member subsequently wish to open a practice on a for-profit basis then, at that time, the member will be required to complete the exempted registration requirements.

Once the above exemptions have been granted, a member who is registering in public practice to provide volunteer services must still meet certain registration requirements. See question 5) below for a list of these requirements.

 

 6) What requirements must be met by members registering in public practice to provide services as a volunteer? 

All members registering in public practice to provide services as a volunteer must meet the following general requirements:
• provide proof of professional liability insurance, but the fee will be waived by the insurer
• each engagement the member undertakes must be submitted to the Association for a practice review; however the fee shall be waived. Volunteer engagements will be held to the same professional standards as regular engagements.

If the volunteer services include preparation of monthly financial statements and/or compilation or review engagements, then the member is required to meet the following requirements in addition to the general ones specified above:

• complete the Review and Compilation Seminar (at the usual cost to CGA members)
• provide proof of access to the CGA-Canada Public Practice Manual, the CICA Handbook-Accounting and the CICA Handbook-Assurance 

If the volunteer services include preparation of audited financial statements, then the member is required to meet the following requirements in addition to the general ones specified above:

• complete the Audit Seminar (at the usual cost to CGA members)
• provide proof of access to the CGA-Canada Public Practice Manual, the CICA Handbook-Accounting and the CICA Handbook-Assurance 

Please note that if a member registers in public practice to provide a certain type of volunteer service and then wishes to provide a different type of volunteer service, the member must meet any additional requirements. For example, if a member met the requirements to provide volunteer compilation engagement services and then wished to provide volunteer audit engagement services, the member would be required to complete the Audit Seminar.

 

 7) Once a member is registered in public practice to provide volunteer services to one NPO, can that member provide volunteer services to other NPOs? 

A member who is registered in public practice to provide volunteer services to one NPO is permitted to provide volunteer services to other NPOs, provided that the member has met the volunteer registration requirements for the specific type of engagement(s) to be provided (see question 5 above). The member must inform the Association that the member is providing volunteer services to another NPO and must submit every engagement to the Association for practice review.

 

 8) What factors should be considered by CGA members and students before accepting a volunteer position? 

In accordance with Rule R301 of the Code, a CGA member or student considering the provision of volunteer services to an NPO must, at a minimum, be competent to perform the duties that may be involved. In addition, before accepting a volunteer position a CGA member or student must determine that the organization meets appropriate professional standards.
 
When considering a prospective volunteer position, it is advisable to:

• Obtain a detailed description of what your responsibilities will be.
• Know why you are there. Review your interest in the corporation or entity and make sure you are able to serve it to the best of your ability without a conflict of interest. Above all, ensure that you are qualified to perform your duties.
• Determine the length of time your predecessor has served, why they left and whether this presents any factors to take into consideration.
• Be familiar with the type of legislation applicable to the NPO you may be serving.
  
   
• Board member of an NPO: Society Act – BC  
• Council member of a strata corporation: Strata Property Act – BC  
• Research and do your homework. Know the direction of the entity and its objectives. Be able to help the entity achieve those objectives to the best of your ability.
• Ask questions. Do not take things for granted and make certain you understand all the issues that are discussed at meetings. Question terms of which you are doubtful.

You may also wish to review further factors that specifically relate to accepting a director’s position and may apply to other volunteer positions.

 

 9) What sort of liability insurance coverage is recommended when providing volunteer services to an NPO? 

If your volunteer position is that of a member of an NPO’s Board of Directors (the Board) or a Condominium Strata Council (the Council), you as a professional accountant will be held proportionately more liable for financial issues of the entity, due to the degree of reliance that the Board or Council may place on you by reason of your professional designation. It is therefore advisable to ensure that liability coverage exists before accepting a position on a Board or Council and that it continues throughout the time you provide volunteer services to the organization. A Directors’ and Officers’ Liability policy protects you in your capacity as a director or officer. The policy should provide coverage for both defense costs and claims expenses.

If you are volunteering as a committee member or other non-board position, you should ensure that the NPO has the appropriate insurance to protect you in your role.

 

 10) Can CGA students provide volunteer services to NPOs? 

Students must decline the provision of a volunteer service if it meets the definition of the practice of public accounting as Rule R523 of the Code prohibits students from engaging in public practice. This limits students more than members in what types of volunteer services they are permitted to provide to NPOs.

 

 11) Can CGA members or students who are providing volunteer services accept an honorarium? 

Members or students performing volunteer services are permitted reimbursement of expenses incurred but remuneration in the form of cash, gifts, service-in-kind or other compensation is not permitted. Acceptance of an honorarium would remove the volunteer status of services provided and may require regular registration in public practice.

 

Common Types of Volunteer Services

Treasurer

 

 1) Does the provision of volunteer treasurer services require registration in public practice? 

Treasurer services do not meet the definition of the practice of public accounting. Therefore CGA members and students who are providing treasurer services on a volunteer basis are not required to register in public practice.

2) How do you know that you are a treasurer? 

A treasurer is defined as “a person appointed to administer or manage the financial assets and liabilities of a society, company or other body.” Thus when a CGA member or student is a treasurer, they:

• are an officer of the organization;
• must issue and attach a Treasurer’s Report to financial statements prepared by them and not a third-party communication, such as issued by public practitioners. In the case of a CGA public practitioner, see the Public Practitioner Providing Volunteer Services section;
• do not act independently of the organization and are involved in management decisions of the entity. Because a treasurer is not independent of the organization, they are not able to perform audits or reviews for the entity. See the Public Practitioner Providing Volunteer Services section regarding compilation engagement services.

Generally, the duties that are assigned to a treasurer would include the following:

• preparation and approval of the financial statements and preparation of the corresponding Treasurer’s Report
• bookkeeping and statutory filing services
• management decisions
• cheque signing
• presentation and interpretation of the financial statements to the Board or membership
• preparation of corporate tax returns when applicable
• preparation of NPO or charity information returns

3) How does a treasurer prepare a Treasurer’s Report? 

A treasurer is an officer of the NPO. All financial statements or financial reports of the NPO issued by the treasurer must have a communication entitled Treasurer’s Report attached. The function of the Treasurer’s Report is to identify that the financial statements or financial reports were prepared by the treasurer. There is no standardized format to a Treasurer’s Report because it is specific to the organization.

4) Can a treasurer issue any form of third-party communication? 

A treasurer must not issue any form of third-party communication (for example, Audit Report, Review Engagement Report or Notice to Reader). If a member wishes to provide any form of third-party communication attached to financial statements, the member will be considered to be practising public accounting and therefore must register in public practice with the Association. Students are not permitted to issue any form of third-party communication as they are not permitted to engage in public practice per Rule R523 of the Code.

5) What should be considered before taking on the position of treasurer on a condominium strata council? 

If you are considering becoming a treasurer on a condominium strata council, see the section on volunteering as a Condominium Strata Council Member .

 

Director or Officer (Non-treasurer) of an NPO

 

1) Are CGA members or students who are serving on a Board of Directors of an NPO required to register in public practice? 

Before taking on a director’s or officer’s (non-treasurer) position with an NPO, CGA members and students must determine if the services to be provided fall under the definition of the practice of public accounting and therefore require registration in public practice. If the board member position includes the provision of financial advising and interpreting services, registration in public practice on a Limited-Other basis may be required. Consult with a Public Practice advisor.

 2) What are specific considerations for CGA members serving as directors and officers of NPOs? 

Members serving on a Board of Directors are essentially acting as agents for the organization. In your role as a director of an NPO, use your experience, business expertise, common sense and integrity in presenting and supporting ideas and decisions that in your opinion best benefit the entity. You will be held accountable for your actions by the members of the organization; thus it is important that you apply yourself diligently to the job that you have volunteered to perform.

Before accepting a position as a member of an NPO’s Board of Directors, it is advisable to ensure that Directors’ and Officers’ Liability Coverage is in place. You should also perform due diligence by taking the steps outlined in the section on general factors to be considered before providing volunteer services. In addition, it is advisable to:

• Review minutes of prior board meetings to determine if there may be such things as pending litigation.
• Determine the NPO’s quality of internal controls.
• Review corporate or society bylaws. Ensure these bylaws are as strong, fair and supportive of the directors and officers as possible and specifically review the indemnification provisions of these bylaws.
• Review the organization’s financial statements. Question problems, deal with them and ensure that they are resolved to your satisfaction.
• Ensure that the Board has access to outside professional expertise and use it if you are unsure of a direction or position taken by the entity.
• Keep pace with current legal trends and be aware of litigation that may possibly affect you in your capacity as a director.

  

Personal Tax Preparation Provided on a Volunteer Basis

 

1) Can personal tax return preparation be done on a volunteer basis? 

The Code defines the practice of public accounting to include providing or offering to provide to the public the preparation of a tax return. However, there are two special circumstances when personal tax returns (T1s) are involved: (a) volunteer preparation of personal tax returns for family members or close friends, and (b) volunteer preparation of personal tax returns for low-income taxpayers provided through an NPO. See below for further information on these special circumstances.

 2) Can personal tax preparation be done on a volunteer basis for family members and close friends? 

For the purposes of volunteer tax return preparation (which means no fee is being charged), it is permitted for CGA members and students to prepare personal tax returns for family members or close friends as they are not considered to be “the public.” To provide this service the CGA member or student must know the taxpayer well, have a sense of trust in their relationship and have a detailed understanding of their tax situation. If any of the above conditions is not met, a member must either register in public practice on a Limited - T1 basis in order to provide personal tax services or decline the T1 preparation request. A student must decline the T1 preparation request if any of the above conditions is not met, as students are not permitted to engage in public practice (per Rule R523 of the Code).

3) How is HST/PST/GST reported when preparing T1s on a volunteer basis? 

If a CGA member or student prepares a T1 for a family member or close friend on a volunteer basis and there is business income being reported, there may be HST/PST/GST involved. This can be reported using two methods:

a) HST/GST and PST is collected throughout the year and remitted to CRA or the Ministry of Finance respectively, on an instalment basis. If so, the CGA member or student cannot be involved in the remittance preparation nor the remitting of the amount as this is a statutory filing, which requires registration in public practice.

b) When HST/GST is imbedded in revenues reported on the T2125 Statement of Business or Professional Activities, the quick method is used to extract the HST/GST on an annual basis, meaning at the time the T1 is prepared. This calculation is explained on the T12125. The CGA member or student can remove the HST/GST amount and arrive at net sales for T1 purposes but cannot be involved in the remittance preparation nor the remitting of the amount (as stated in a) above) as this is a statutory filing.

4) Can personal tax preparation be done on a volunteer basis for low-income taxpayers? 

When low-income taxpayers are provided with free personal tax preparation services, CGA members and students may provide these services contingent on the following:

• these services must be provided through an NPO and not independently; and
• the NPO provides CRA training (or equivalent) through the CRA Community Volunteer Tax Program (CVITP) to its volunteers; and
• the NPO provides errors and omissions insurance for its volunteers; and
• if the NPO does not use the CVITP, the NPO must provide written taxpayer disclosure acknowledging that a volunteer has prepared the tax return.

As CGA members and students must be competent to provide any services provided by them (per Rule R301 of the Code), members and students providing volunteer tax preparation services must ensure that the training they receive fully equips them to perform their volunteer duties.

 

Committee Member of an NPO

 

1) What should be considered by CGA members and students before agreeing to serve as a committee member of an NPO? 

The provision of volunteer services may either require registration in public practice (for members) or be entirely prohibited (for students) if the services are considered to be the provision of public accounting services. Therefore prior to volunteering as a committee member of an NPO, CGA members and students must determine if the services to be provided fall under the definition of the practice of public accounting. In cases in which an NPO’s finance committee advises its Board on financial matters but decisions based on that advice are made by the Board, a CGA member or student volunteering on an NPO’s finance committee is not considered to be providing public accounting services and does not have to register in public practice. Note also that it is advisable when volunteering as a committee member of an NPO to ensure that appropriate insurance coverage is in place. 

 

Reviewing Financial/Accounting Work of Another Party on a Volunteer Basis

 

1) Does reviewing financial/accounting work of another party on a volunteer basis require registration in public practice? 

A request for a CGA member or student to “review” the books of an NPO prepared by another individual is considered assurance work per the CICA Handbook-Assurance Section 8500 and thus would be providing a public accounting service. In this case, registration in public practice as a volunteer is required (except when a treasurer is supervising a bookkeeper’s work to ensure the accuracy of financial statements issued by the treasurer). 

 

Services Provided to an NPO when not a Board or Committee Member

 

1) What should be considered by CGA members and students before agreeing to provide volunteer services to an NPO when not a Board or Committee member? 

The provision of volunteer services may either require registration in public practice (for members) or be entirely prohibited (for students) if the services are considered to be the provision of public accounting services. Therefore CGA members and students who are approached to provide volunteer services to an NPO of which they are not a Board or Committee member must determine if the services to be provided fall under the definition of the practice of public accounting. It is advisable also to ensure that the organization’s insurance covers the services to be provided.

 

Condominium Strata Council Member

 

1) Does serving as a condominium strata council member require registration in public practice? 

The provision of volunteer services may either require registration in public practice (for members) or be entirely prohibited (for students) if the services are considered to be the provision of public accounting services. Therefore before taking on a condominium strata council member’s position, CGA members and students must determine if the services to be provided fall under the definition of the practice of public accounting. An additional issue concerning strata council positions is that they may be paid positions if remuneration is permitted by the strata’s bylaws. If remuneration is accepted by the CGA member or student, the position is no longer considered to be a volunteer position. See the FAQ on accepting honorariums.

2) What are specific considerations for CGA members serving as condominium strata council members? 

Members serving on their condominium’s strata council are essentially acting as agents for the strata corporation. In your role as a council member, use your experience, business expertise, common sense and integrity in presenting and supporting ideas and decisions that in your opinion best benefit the entity. You will be held accountable for your actions by the members of the organization; thus it is important that you apply yourself diligently to the job that you have volunteered to perform.

Before accepting a position as a strata council member, it is advisable to ensure that the strata corporation has the appropriate insurance in place to protect you either as a strata council member or as a strata committee member. You should also perform due diligence by taking the steps outlined in the section on general factors to be considered before providing volunteer services and then considering the more specific concerns found in the section on volunteering as a director . In addition, it is advisable to become familiar with the Strata Property Act – BC which regulates the activities of condominium strata councils.

3) What are specific considerations for CGA members or students serving as strata council treasurers? 

If a CGA member or student is acting as treasurer on a strata council in a volunteer capacity, these duties are not considered public accounting services. See Treasurer section.

The treasurer’s position holds additional responsibilities over and above those normally found in an NPO. For example, effective December 14, 2013, strata corporations must obtain a depreciation report or obtain a three-quarters vote to waive this requirement. Strata corporations with fewer than five units are exempt. Updates will be required every three years and include onsite inspection.

• View the Guide on Depreciation Reports 
• The Condominium Home Owners Association of B.C. (CHOA) also has information on their website 

 

Public Practitioner Providing Volunteer Services (to Clients and Non-clients)

 

1) Can a public practitioner who is providing compilation engagement services to a client that is an NPO also provide volunteer services to the client? 

A public practitioner providing compilation engagement services to a client that is an NPO may also provide volunteer services to that client, providing that interest, influence and relationship (per Rule R202 of the Code) are disclosed in the Notice to Reader report. Although the provision of treasurer duties would be considered the provision of public accounting services, because the services are being provided to a client, as long as interest, influence and relationship are disclosed in the Notice to Reader report, it is permitted.

2) Can a public practitioner who is providing assurance engagement services to a client that is an NPO also provide volunteer services to the client? 

A public practitioner providing assurance engagement services to a client that is an NPO is prohibited from being appointed as the organization’s treasurer, as this would create an independence issue that would preclude acceptance of an audit or review engagement by the member. Per Rule R203 of the Code, a member providing assurance services to an NPO may accept an honorary or advisory position other than officer or director as long as the member does not assume administrative or financial responsibilities or make decisions affecting the management of the organization.

3) Can a public practitioner provide volunteer services to an NPO that is not a client? 

When a public practitioner provides volunteer services to an NPO that is not a client, the practitioner must determine whether the services fall under the definition of the practice of public accounting. If so, the practitioner must either change the relationship to that of a client in order to provide those services on a pro bono basis (per Rule R506.1) or withdraw from volunteering the services. If the services are outside of the practitioner’s registration category, the practitioner must register separately as a volunteer.

 

 Government Election Volunteer Positions  

1) Does serving in a volunteer position during an election require registration in public practice? 

CGA members or students considering volunteer positions during elections for all levels of government must first establish what their responsibilities are and then determine if any of them fall under the definition of the practice of public accounting.

Municipal Elections: Volunteer election positions are not standard throughout B.C. Review volunteer descriptions for your municipality and determine if they qualify as a public accounting service. If your area uses a financial agent, see below in the Provincial Elections section.

Provincial Elections: See the BC Elections website for volunteer position descriptions. The position of Financial Agent requires registration in public practice because the agent must determine the fair market value of donations-in-kind and file an election financing report with the Chief Electoral Officer.

Federal Elections: The position of Official Agent requires registration in public practice because, per the Election Handbook for Candidates, their Official Agents and Auditors, the agent must prepare the Candidate’s Electoral Campaign Return and Contributions to a Candidate at an Election - Information Return.

 

Other Types of Volunteer Opportunities

 

For all other types of volunteer opportunities, please consult a Public Practice advisor.