Please visit the link below for information on an Offshore Trusts Training Course.
http://www.cmabc.com/index.cfm/ci_id/12574/la_id/1/document/1/re_id/0
Wednesday, July 23, 2008
Wednesday, July 16, 2008
Commissions for Sale of Tax Shelters
(From Bob Parry, Director, Public Accounting, CMA Canada)
Please see the column by Jacquie McNish from today's Globe and Mail at the following link (http://www.cmabc.com/index.cfm/ci_id/12539/la_id/1/document/1/re_id/0). It reports a major lawsuit that has arisen in Ontario related to the indirect receipt by a practitioner of commissions from to the sale of tax shelters to his client. This evidences the pitfalls of receiving such fees and the conflict of interest, real or perceived, that exists when you are providing advisory services. For this reason, the receipt of such commissions is forbidden by the harmonized Rules of Professional Conduct of the Institutes of Chartered Accountants.
CMAs may have similar ethical rules in their respective provinces or, as is the case in Alberta, bound by the CA rules. In any case, practitioners are bound by the Code of Ethics of The International Federation of Accountants which states:
240.7 A professional accountant in public practice should not pay or receive a referral fee or commission, unless the professional accountant in public practice has established safeguards to eliminate the threats or reduce them to an acceptable level. Such safeguards may include:
• Disclosing to the client any arrangements to pay a referral fee to another professional accountant for the work referred.
• Disclosing to the client any arrangements to receive a referral fee for referring the client to another professional accountant in public practice.
• Obtaining advance agreement from the client for commission arrangements in connection with the sale by a third party of goods or services to the client.
The threats that are referred to are those to the Fundamental Principles set out in the Code of Ethics. In this case they would include threats to the fundamental principle of Objectivity, specifically self-interest and advocacy. It would be difficult to establish or demonstrate appropriate safeguards in circumstances such as this.
Please see the column by Jacquie McNish from today's Globe and Mail at the following link (http://www.cmabc.com/index.cfm/ci_id/12539/la_id/1/document/1/re_id/0). It reports a major lawsuit that has arisen in Ontario related to the indirect receipt by a practitioner of commissions from to the sale of tax shelters to his client. This evidences the pitfalls of receiving such fees and the conflict of interest, real or perceived, that exists when you are providing advisory services. For this reason, the receipt of such commissions is forbidden by the harmonized Rules of Professional Conduct of the Institutes of Chartered Accountants.
CMAs may have similar ethical rules in their respective provinces or, as is the case in Alberta, bound by the CA rules. In any case, practitioners are bound by the Code of Ethics of The International Federation of Accountants which states:
240.7 A professional accountant in public practice should not pay or receive a referral fee or commission, unless the professional accountant in public practice has established safeguards to eliminate the threats or reduce them to an acceptable level. Such safeguards may include:
• Disclosing to the client any arrangements to pay a referral fee to another professional accountant for the work referred.
• Disclosing to the client any arrangements to receive a referral fee for referring the client to another professional accountant in public practice.
• Obtaining advance agreement from the client for commission arrangements in connection with the sale by a third party of goods or services to the client.
The threats that are referred to are those to the Fundamental Principles set out in the Code of Ethics. In this case they would include threats to the fundamental principle of Objectivity, specifically self-interest and advocacy. It would be difficult to establish or demonstrate appropriate safeguards in circumstances such as this.
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