Rule 216 Consultation

The suggested changes to Rule 216 - Commissions could impact you, be sure to provide your feedback before the consultation period ends!

We want your input!

The CPA profession has established a Unified Rules Standing Committee that is seeking to harmonize the CPA Rules of Professional Conduct so that they are consistent across Canada. The committee is made up of representatives from the provincial and national CPA bodies. One of the Rules the committee is seeking to harmonize is Rule 216, Payment or Receipt of Commissions. To that end, the committee has compiled a draft new rule, for consideration by the profession. The potential new rule, if adopted, would significantly change the profession’s restrictions around commissions.

CPA Newfoundland and Labrador is seeking member feedback regarding the potential changes to Rule 216. To assist us in this effort, we ask that you send any comments or questions you have regarding the potential changes by email to feedback@cpanl.ca. Your feedback is required by April 5, 2018.

Your feedback will be used to help CPA Newfoundland and Labrador provide its response to the standing committee.

 

Potential Rule

View Full Draft Rule

A national CPA working group is recommending a change to Rule 216 that will allow a broader range of commissions to be offered or accepted.

The potential Rule would adopt a threats and safeguards framework that applies to all CPAs and firms providing professional services as defined in the CPA Rules. The potential rule would still prohibit a member and/or firm from paying or receiving commissions or referral fees for the provision of assurance services, and for the provision of other professional services to a client for whom the member or firm also provides assurance services.

However, in all other situations where members or firms provide professional services, a threats and safeguards approach would be taken, with a minimum requirement for client consent, unless the threat is clearly insignificant. “Consent” is defined in the potential rule to mean “fully informed and voluntary consent given in writing, after disclosure of sufficient information and with sufficient time to make a knowledgeable decision.” Depending on the situation, additional safeguards may be required.

Members and firms in public accounting would continue to be allowed to pay or receive commissions in receipt of the purchase or sale of a public accounting practice – the only exception in place to the prohibition of commissions under the current rule.

View common FAQ's related to the draft Rule 216