| Q. |
Why did CPA Australia decide to create a concessional Public practice certificate (PPC)? The Institute of Chartered Accountants (ICAA) has offered this for some time. |
| A. |
The Limited practice certificate (LPC) has been created to provide greater support to members who are entering or exiting public practice and reduce some of the costs of professional obligations such as professional indemnity insurance and quality assurance (QA), based on individual risk profiles.
The professional obligations for members who hold a LPC will be the same as for those who hold a full PPC to ensure the same high level of service for consumers. |
| Q. |
Why was $25,000 set as the lower threshold for a PPC? |
| A. |
Extensive consultation with member groups was undertaken prior to developing a series of different models for consideration. This low threshold was deemed to be most appropriate based on our member profile and risk assessment. |
| Q. |
When will the thresholds for public accounting services and the LPC be reviewed? |
| A. |
The $7,500 and $25,000 thresholds will be reviewed every three years. |
| Q. |
If I have an LPC, can I advertise? |
| A. |
Yes. Members holding a LPC are permitted to advertise but are not able to use the Public practice branding / logo.
All members should use the CPA or FCPA designation on their business stationery. |
| Q. |
If I take out a LPC will I be covered by Professional standards legislation / Limited liability schemes? |
| A. |
Yes. CPA Australia is maintaining identical entry standards and ongoing compliance program members for both the LPC and PPC. |
| Q. |
What are the prerequisites for a LPC? |
| A. |
The prerequisites for a LPC are exactly the same as the PPC. You must:
1. Be a CPA or FCPA.
2. Have completed the CPA Program tax segment.
3. Have appropriate work experience as defined in the by-laws.
4. Earn less than $25,000 per year from public accounting services. |
| Q. |
What happens if I currently have a PPC and I am planning to exit my practice and keep a few small clients? |
| A. |
Members who currently have a PPC or have held a PPC within the past five years are eligible to apply for a LPC without having to undertake any further education.
Members who have held a full PPC, but wish to downsize their practice and take out the LPC will have two years within which to phase out the use of old stationery if it uses the Public practice logo.
In accordance with Professional standards legislation, LPC holders in NSW will continue to be covered by the limited liability scheme and be required to use the mandatory disclosure statement on business stationery. |
| Q. |
What type of QA will there be for the LPC? |
| A. |
The QA program for LPC holders will be tailored to individual risk management profiles. This policy is in line with our overall QA strategy and current policies |
| Q. |
How much will the QA cost? |
| A. |
The actual cost of the QA program will be dependent on the individual risk profile of the member. |
| Q. |
How can I apply for a LPC? |
| A. |
Existing PPC holders wishing to obtain a LPC can download the application form or contact their local office. |
| Q. |
What is the difference between the LPC program and the full Public practice program? |
| A. |
The LPC program includes modules which cover:
an introduction to public practice
ethics and professionalism
and other relevant material
The LPC does not include:
business planning
issues related to the structure of a practice
people management
service strategies
operating systems
financial plans, including practice KPIs
succession planning
the development of strategies to build or grow a practice
Members who expect to earn more than $25,000 per annum from public accounting services in the future should take the Practice management distance learning program to earn credits toward a full PPC. |
| Q. |
When will the first LPC program be conducted? |
| A. |
The first program will commence in semester 2, 2007. |
| Q. |
How much professional indemnity insurance cover must I hold? |
| A. |
CPA Australia by-laws specify the minimum levels of professional indemnity insurance to be held by members. Currently members must hold $250,000 in all states, except NSW which requires $500,000.
There is no difference between the professional indemnity insurance requirements for LPC or PPC.
CPA Australia recommends that all members hold a minimum of $500,000 as Professional standards legislation (which will require a minimum of $500,000 professional indemnity insurance) is expected to be effective in all states and territories in the near future.
An update of Professional standards legislation is available from our website. |
| Q. |
If I take out a LPC how much will my professional indemnity insurance cost? |
| A. |
CPA Australia, via its insurance scheme brokers will offer a tailored policy for members who hold a LPC from 1 January 2007.
However, you may choose any insurance provider you like as long your cover meets the minimum requirements stated in the CPA Australia by-laws. |
| Q. |
I am already earning more than $7500 from public accounting services, what do I do? |
| A. |
If you are already earning more than $7500 from private public accounting services and you do not hold a PPC you are currently in breach of CPA Australia by-laws. Contact your local office and speak to the Public practice officer who will be able to provide advice and guidance. |
| Q. |
If I hold a LPC, what services can I offer? |
| A. |
There are no limitations on the services which an LPC holder may offer, subject to external regulator approvals.
You should note that your risk profile will be higher if you undertake work considered high risk such as company audits, financial planning or insolvency services. Such services may also affect the cost of your Professional indemnity insurance and tailored QA program. |
| Q. |
Can a retired member hold a LPC? |
| A. |
Retired members are eligible to hold a LPC as long as fees received from those services do not exceed $25,000 and the member is not in any other paid employment.
Importantly, all members (whether they are retired or not) who undertake any public accounting services must undertake a minimum of 120 hours per triennium of CPD (with a minimum of 20 hours in any year). |
| Q. |
Is the LPC designed as a pathway to obtaining a PPC? |
| A. |
The LPC has been designed to support members entering public practice by reducing barriers and associated entry costs.
However if you want to make a career in public practice, you should complete the Practice management distance learning module to get credits toward a PPC, rather than the LPC distance module for which you will not get credits.
Members who have completed the Practice management distance learning program are still eligible to have a LPC and have five years to complete the Public practice residential and apply for a PPC. |
| Q. |
If I complete the LPC program and then decide to obtain a PPC, do I get credits towards the Public practice program? |
| A. |
It dependsÂ…if you start with a LPC and want to change to a PPC later, you should complete the Practice management distance learning program rather than the LPC distance program because you will not get credits toward the PPC for completing the LPC distance module.
If you complete the Practice management distance learning module, you are still eligible to have a LPC, as long as the fees you receive are less than $25,000 per year. You will have the flexibility to complete the remaining components of the Public practice program (Public practice residential) within five years to obtain a PPC. |
| Q. |
What happens if I hold an LPC or PPC and breach CPA by-laws? |
| A. |
If you breach CPA Australia by-laws, you may not be covered by your professional indemnity insurance and you will be referred to Professional conduct.
If you think you may be in breach, contact your local office to seek guidance. |
