Public accounting licence (CPA public practice)

A public accounting licence is the regulatory permission to do public accounting work. In Ontario, the Public Accounting Act, 2004 defines the practice of public accounting as certain services provided independently of the person being served: assurance engagements, including audits and reviews, and certain compilation services, where a third party can reasonably be expected to rely on them, subject to any prescribed limitations; under section 2(3), a compilation carrying the prescribed notice is not public accounting. A buyer of an accounting firm meets the licence when asking who at the firm can sign engagements after closing.

How Ontario and Alberta differ

In Ontario, a person engaged in the practice of public accounting must, if an individual, be licensed under the Act or, if a professional corporation, hold a certificate of authorization, subject to the exceptions in section 3(2) and (3). The Act ties an individual’s licence to membership: it is revoked on the day the person ceases to be a member of CPA Ontario. Alberta’s Chartered Professional Accountants Act adds a firm-level registration. In addition to any other registration held under the Act, a member, professional corporation or partnership that conducts any aspect of a public accounting practice must, subject to section 49(3), register as a professional accounting firm, unless the work is done in an already registered firm. This entry covers Ontario and Alberta only; check the rules in the province where the firm practises.

What to ask

• Which individuals hold the licence or registration and whether they will stay after closing.
• Whether the firm holds the corporate authorization or firm registration its province requires.
• Whether the buyer is already licensed or registered in that province, or must apply first.

Timing is discussed in can a professional buy a practice before being licensed in that province. The firm-level counterpart is the certificate of authorization.