Minister announces changes to accounting legislation

George Sweeney, Minister of Government Services and Lands, has announced proposed changes to the Public Accountancy Act. These changes are a result of recent public consultations that were held to obtain input into proposals submitted by several bodies, including government, the Public Accountants Licencing Board, and the Institute of Chartered Accountants of Newfoundland.

"We have considered the feedback received during the public consultation process and compared them to research of accounting practices in other jurisdictions to make our decision," stated Minister Sweeney.

The request of public accounting firms to have the option to operate in a corporate form or as a limited liability partnership will be allowed through an amendment to the legislation.

"Following examination of this proposed change, I feel that both options will provide adequate protection for the public while not exposing public accountants to unreasonable levels of personal risk. Some Canadian jurisdictions have already moved in this direction, and others are currently considering such changes. I will be preparing the necessary legislative changes to the Public Accountancy Act to be debated in the House of Assembly this fall," stated Minister Sweeney.

Other requested changes will not be made at this time. As a result of departmental analysis, it has been determined that the restriction of the practice of review engagements to only those licenced under the Public Accountancy Act is not in the public interest. Additionally, government will not be proceeding with the proposals to restrict auditing firms from providing other services to their clients, or to restrict the period that a firm can perform audits for a client.

"It is believed that restricting the practice of review engagements would add unnecessary cost to small businesses, particularly in rural areas, and unnecessarily restrict competition. The proposal to restrict auditing firms from providing additional services to their clients raises similar concerns. Concerns about the lack of auditor independence would be better addressed on a national basis through the Assurance Standards Board. For these reasons, changes will not be made to the legislation in these areas at this time," said Minister Sweeney.

Media contact: Jeff Mackey, Communications, (709) 729-4860.

2003 04 22                                        3:20 p.m.