The WhIP Journal                              

ILLUSTRATION OF A FIRM”S

PRIVACY STATEMENT FOR ATTACHMENT TO AN ENGAGEMENT LETTER

Introduction

(Name of public accounting firm) collects, uses and discloses personal information in the possession, or under the control, of its clients to the extent required to fulfill its professional responsibilities and operate its business. The firm is committed to maintaining the privacy of personal information provided by its clients and protecting all personal information in its possession or control. This Privacy Policy sets out the principles and procedures that the firm follows in meeting its privacy commitments to its clients and complying with the requirements of federal and provincial privacy legislation.

Principle #1: The firm is accountable for personal information in its possession or control.

1.        The firm is accountable for all personal information in its possession or control. This includes any personal information that the firm received directly from clients who are individuals, or indirectly, through clients that are organizations (e.g., corporations, government entities, not-for-profit organizations).

2.        The firm has:

1.                       established and put into effect policies and procedures aimed at properly protecting personal information;

2.                       educated its partners and employees regarding its privacy policy and their role and responsibilities in keeping personal information private; and

3.                       appointed its Chief Privacy Officer to oversee privacy issues at the firm. 

3.        If you have any questions about the firm’s privacy policies and practices, the firm’s Privacy Officer can be reached by email at (insert email address), by phone at (insert phone #) and by letter (insert address of office at which Privacy Officer is located).

Principle #2 The firm identifies the purposes for which it collects personal information from clients before it is collected.  

4.        The firm collects personal information from clients and uses and discloses such information, only to provide the professional services that the client has requested. The types of information that may be collected for this engagement, and the purposes for which it is collected, are set out in under Principles 3 and 4 of this privacy statement.  ..

Principle #3 –The firm obtains a client’s consent before collecting personal information from that client.

5.        The engagement letter to which this privacy statement is attached sets out your responsibility to obtain any consents required under applicable privacy legislation, for collection, use and disclosure to us of personal information. By signing the engagement letter, you are formally acknowledging this responsibility.

Such personal information could include: (List the types of personal information to which the partner and staff on the the engagement will like need to have access.  Examples include personal information of customers, employees and others having dealings with the company).

:

1. home addresses

2. home telephone numbers

3. personal identification numbers (e.g., social insurance numbers, credit card numbers)

4. financial information (credit ratings, payroll information, personal indebtedness)

5. personnel information (e.g., employment history, references to criminal records)

6. information linked to the type of client, for example:

a)       information in medical records (with respect to organizations such as hospitals or medical practices)

b)    information related to race, religion, sexual preference, receipt of welfare or subsidized housing (with respect to various types of not-for-profit and government entities)

c)    source data in claims and in-force databases (with respect to insurance companies)

d)       tenant information (with respect to residential leasing companies).

Principle #4 – The firm collects only that personal information required to perform its professional services and operate its business, and such information is collected by fair and lawful means. [Note that the following example is applicable to an audit of financial statements. It should be amended as needed to reflect the type of service being provided to the client.]

6.        The partners and staff involved in this engagement need access to some or all of the types of personal information, noted under principle 3 above, to obtain evidence to support the firm’s opinion on the company’s financial statements. Such personal information will be a significant component of various transactions and events affecting the financial statements that will be subjected to confirmation, testing, analyses and such other procedures as the firm considers necessary to perform an audit in accordance with generally accepted auditing standards. 

Principle #5 – The firm uses or discloses personal information only for purposes for which it has consent, or as required by law.  The firm retains personal information only as long as necessary to fulfill those purposes. 

7.        As required by professional standards, rules of professional conduct and regulation, the firm documents the work it performs in records, commonly called working paper files. Such files may include personal information obtained from a client.

8.        Working paper files and other files containing, for example, copies of personal tax returns are retained for the time period required by law and regulation [or for a specified time period].

1.        The personal information collected from a client during the course of a professional service engagement may be:

1.        shared with the firm’s personnel participating in such engagement;

2.        disclosed to partners and employees within the firm to the extent required to asses compliance with applicable professional standards and rules of professional conduct, and the firm’s policies, including providing quality control reviews of work performed;

3.        provided to members of the organization’s audit committee and board of directors, and others in the company that might not otherwise have access to the information, in the course of communicating aspects of the results of our audit; and

4.        provided to external professional practice inspectors (e.g., representatives of the Canadian Public Accountability Board, or a provincial institute of chartered accountants), who by law, professional regulation, or contract have the right of access to the firm’s files for inspection purposes.

9.        The firm regularly and systematically destroys, erases, or makes anonymous personal information no longer required to fulfill the identified collection purposes, and no longer required by laws and regulations. 

Principle #6 – The firm endeavours to keep accurate, complete, and up-to-date, personal information in its possession or control, to the extent required to meet the purposes for which it was collected. 

10.     Individual clients are encouraged to contact the firm’s engagement partner in charge of providing service to them to update their personal information.  

Principle #7 – The firm protects the privacy of personal information in its possession or control by using security safeguards appropriate to the sensitivity of the information. 

11.     Physical security (e.g., restricted access, locked rooms and filing cabinets) is maintained over personal information stored in hard copy form. Partners and employees are authorized to access personal information based on client assignment and quality control responsibilities.

12.     Authentication is used to prevent unauthorized access to personal information stored electronically. Encryption is used to prevent unauthorized access to personal information received or sent over the Internet.

13.     For files and other materials containing personal information entrusted to a third party service provider (e.g., a provider of paper based or electronic file storage), the firm obtains appropriate assurance to affirm that the level of protection of personal information by the third party is equivalent to that of the firm.

Principle #8 –The firm is open about the procedures it uses to manage personal information. 

14.     Up-to-date information on the firm’s privacy policy can be obtained from the firm’s Privacy Officer (see contact information under principal 1).

Principle #9 – The firm responds on a timely basis to requests from clients about their personal information which the firm possesses or controls.  

15.     Individual clients of the firm have the right to contact the engagement partner in charge of providing service to them and obtain access to their personal information. Similarly, authorized officers or employees of organizations that are clients of the firm have the right to contact the engagement partner in charge of providing service to them and obtain access to personal information provided by that client. In certain situations, however, the firm may not be able to give clients access to all their personal information. The firm will explain the reasons why access must be denied and any recourse the client may have, except where prohibited by law.

Principle #10 – Clients may challenge the firm’s compliance with its Privacy Policy. 

16.     The firm has policies and procedures to receive, investigate, and respond to clients’ complaints and questions relating to privacy.

17.     To challenge the firm’s compliance with its Privacy Policy, clients are asked to provide an email message or letter to the firm’s Privacy Officer (see contact information under principal 1 above). The firm’s Privacy Officer will ensure that a complete investigation of a client complaint is undertaken and will report the results of this investigation to the client, in most cases, within 30 days.