CGA-BC Plain English Guide to Independence
Professional standards require that you and your firm, including partners and professional employees, be independent whenever your firm performs an assurance service or specified auditing procedure for a client.
The CGA-BC Independence Standard (the Standard) more clearly articulates the rules you already follow to ensure you are independent of the clients you serve. The Standard expands upon the values of integrity and sound judgment that are already at the very foundation of our profession.
Many of the independence rules introduced in 2005 include some of the past conflict of interest rules. There really are only four additional prohibitions that have been incorporated into the Standard. They are:
- Making journal entries or accounting classifications without client management approval (R724);
- Provision of legal services (R731);
- Providing specified corporate finance services (R734); and
- Accepting a gift or hospitality that is other than clearly insignificant (R737).
The 2005 CGA-BC AGM included a vote on the Standard that included:
- Removal of existing rules regarding conflicts of interest in the preparation of financial statements
- Addition of a seventh ethical principle relating to independence
- Addition of rules R701 to R741 to replace the deleted rules
The independence rules have been developed to integrate the Standard into the Code of Ethical Principles and Rules of Conduct and to provide clear statements of the prohibitions contained in the Standard.
To assist practitioners to implement the Standard, a plain English guide has been provided.