C-26, r. 28 - Code of ethics of certified management accountants

Section 34.6 Disposition versions

2012-09-01

34.6. A member commits a breach of the independence rule contemplated in section 34.2 if, in the context of an audit or review engagement:

(1)  the member or partnership within which he practises his profession, or a network partnership or joint-stock company is in a situation described in paragraphs 1 to 5, 12 or 13 of section 34.5. For the application of those paragraphs, the word “client” includes affiliates;

(2)  the member or partnership within which he practises his profession performs such an engagement when the member, partnership or a network partnership or joint-stock company holds and controls a financial interest in the client or an affiliate or holds a financial interest in the client or an affiliate that allows him to exercise significant influence over the client’s directors or officers within the meaning of Sections 3050 and 3840 of the Canadian Institute of Chartered Accountants Handbook;

(3)  the member, as the person with primary responsibility for an engagement for a client, performs the engagement at the main office in which one of the partners or shareholders with voting rights of the partnership or joint-stock company practises when this partner, this shareholder, a dependent or spouse holds and controls a financial interest in the client or an affiliate, or holds a financial interest in the client or an affiliate that allows him to exercise significant influence over the client’s directors or officers within the meaning of Sections 3050 and 3840 of the Canadian Institute of Chartered Accountants Handbook;

(4)  the member or partnership within which he practises his profession performs such an engagement when the pension or retirement plan of the partnership or of a network partnership or joint-stock company, holds and controls a financial interest in the client or an affiliate, or holds a financial interest in the client or an affiliate that allows him to exercise significant influence over the client’s directors or officers within the meaning of Sections 3050 and 3840 of the Canadian Institute of Chartered Accountants Handbook;

(5)  the member or partnership within which he practises his profession performs such an engagement when the partnership or a network partnership or joint-stock company, holds a financial interest in an enterprise, and the member or the partnership knows that the client or an affiliate, or a director, officer or controlling person of the client or affiliate, within the meaning of paragraph 3 of section 2 of the Canada Business Corporations Act (R.S.C. 1985, c. C-44), also holds a financial interest in the enterprise, unless the client or affiliate is not in position to exercise significant influence over the enterprise within the meaning of Sections 3050 and 3840 of the Canadian Institute of Chartered Accountants Handbook;

(6)  the member participates on the engagement team or any other team within a network partnership that is in a position to influence the engagement when the member holds a financial interest in an enterprise and knows that the client or a director, officer or controlling person of the client or an affiliate holds a financial interest in the enterprise, unless the client is not in a position to exercise significant influence over the enterprise within the meaning of Sections 3050 and 3840 of the Canadian Institute of Chartered Accountants Handbook;

(7)  the member or partnership within which he practises his profession performs such an engagement for a client or an affiliate when a partner or shareholder with voting rights within the partnership or joint-stock company where the member practises the profession, or any candidate to one of the accounting professions employed by the partnership, or a dependent or spouse, owns more than 0.1% of the securities of the client or affiliate within the meaning of section 1 of the Securities Act (chapter V-1.1), or controls the client or affiliate by means other than the ownership of the majority of the common shares of the client or affiliate;

(8)  the member participates on the engagement team or any other team within a network partnership or joint-stock company within which he practises his profession that is in a position to influence the engagement when the member knows that a parent, non-dependent child or sibling owns more than 0.1% of the securities of the client or an affiliate within the meaning of section 1 of the Securities Act, or controls the client or affiliate by means other than the ownership of the majority of the common shares of the client or affiliate;

(9)  the member or partnership within which he practises his profession performs such an engagement when the partnership or a network partnership or joint-stock company has a business relationship with the client or its directors or officers, unless such business relationship is clearly insignificant to the partnership or network partnership or joint-stock company and the client or its directors or officers, as the case may be;

(10)  the member or partnership within which he practises his profession performs such an engagement when a person within a network partnership serves as an officer or a director of the client other than serving as secretary and the practice is permitted under the law or standards of practice, and the duties undertaken are exclusively administrative in nature;

(11)  the member or partnership within which he practises his profession performs such an engagement when, during either the period covered by the financial statements subject to audit or review or the engagement period, a person within a network partnership or joint-stock company makes a management decision or performs management functions for the client;

(12)  the member or partnership within which he practises his profession performs such an engagement when, during either the period covered by the financial statements subject to audit or review or the engagement period, the member or another person within the partnership or within a network partnership or joint-stock company:

(a)  prepares or changes a journal entry, determines or changes an account code or a classification for a transaction, or prepares or changes another accounting record without obtaining the approval of the client’s management; or

(b)  prepares a source document or originating data, or makes a change to such a document or data;

(13)  the member or partnership within which he practises his profession performs such an engagement when, during either the period covered by the financial statements subject to audit or review or the engagement period, the member, the partnership or a network partnership or joint-stock company or a person within the partnership or network partnership or joint-stock company provides legal services to the client other than those referred to in section 141 of the Act respecting the Barreau du Québec (chapter B-1) in the resolution of a dispute or litigation in circumstances where the matters in dispute or subject to litigation are material in relation to such financial statements.

O.C. 406-2010, s. 3; O.C. 904-2011, s. 16.