By James Langton

(December 12 – 12:45 ET) – The Ontario Appeals Court has reinstated a conviction against an accountant for practicing without a licence, reaffirming the power of independent bodies to grant enforceable professional designations.

The court allowed an appeal by the Crown, setting aside the acquittal and reinstating the conviction of David Venn, a Certified General Accountant (CGA) for practicing as a public accountant without a license.

The legislation governing accountants only allows chartered accountants (CAs) to be defined as public accountants, which can prepare financial statements. CGAs are prevented ” from issuing statements, opinions, reports or certificates, in connection with such practice.”

The court said, “The purpose of restricting the type of work a CGA may do is to protect the public. Although an economic benefit may inure to those who hold one of the accounting licences I have described, economic benefit was not the reason the Legislature conferred a licensing power on the various self-governing organizations. The granting of a licence does, however, give the holder an exclusive right to practice in a stated area in order to protect the public who may not be capable of assessing the quality of the services required in a particular instance.”

Venn, a CGA, prepared income tax returns to which financial statements were attached for a company called The Coach House in 1992, 1993 and 1994. After preparing the financial statement in 1992, he was prosecuted for practicing without a licence and convicted following a trial in September 1993.

Venn was again charged a couple of years later with a single count involving three incidents of practicing as a public accountant. He was convicted by Justice of the Peace P. Leclerc of the charge and fined $5,000. He appealed to Judge W.F. Fitzgerald who allowed his appeal and quashed his conviction. The issue was whether the financials were prepared for management’s use alone, or whether they were used for broader purposes.

The court found that since the statements were given to TD Bank, and Venn knew they were given to the bank, they were no longer just for internal use. This puts his practice into the realm of public accounting in the court’s opinion, thus reinstating the conviction.