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CPA Professional Conduct: Auditor independence — Harmonized Rule of Professional Conduct (Rule 204)

Ef­fec­tive date:

The most recent version of Rule 204 was issued on November 14, 2014 and is generally effective for the first reporting period commencing after December 15, 2014



Rule 204 sets out the Canadian profession’s standards, ensuring Chartered Professional Accountants (CPAs) maintain auditor independence during engagements they undertake or participate in. It sets the standards and requirements CPAs must maintain as part of their professional conduct.

The extent to which Rule 204 is adopted by individual provincial bodies (and CPA Bermuda) is determined by those bodies. While the principles of Rule 204 have generally been adopted across Canada (and Bermuda), there may be some specific differences in some jurisdictions. Please refer to the Code or Rules of Professional Conduct as adopted by each provincial body.

Ethics standards adopted by Canadian provincial bodies are created in alignment with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA).

The Public Trust Committee (PTC) for the profession is empowered to adopt harmonized independence standards for CPAs and ensure these standards are kept up to date. In doing so, the PTC monitors independence standards as they are developed by IESBA.

The Sections of Rule 204 are as follows: (i) definition of independence in assurance and specified auditing procedures engagements; (ii) identification of threats and safeguards; (iii) documentation required for a decision to accept or continue an engagement after a threat to independence is identified; (iv) specific prohibitions that members and firms shall comply with across a range of situations where independence is threatened; (v) required procedures for members to disclose prohibited interests and relationships; (vi) obligations and procedures for firms, partners and professional employees to ensure compliance; (vii) maintenance of independence in insolvency engagements; (viii) disclosure of impaired independence; (ix) requirements and processes when a member or firm has breached an independence requirement; and (x) audits under elections legislation.

History of Rule 204

The most recent version of Rule 204 is dated November 14, 2013. For this and earlier versions of Rule 204 (including a markup of the changes made to the April 2011 version in November 2013), refer to the attached link to the CPA Canada website, which also provides Council’s interpretations of the November 2013 version of Rule 204.

Amend­ments un­der con­sid­er­a­tion

    Correction list for hyphenation

    These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.