CPA's to lose liability cover Australia wide. What's next for your engagement letters?

From October 7th, CPA Australia will no longer have its limited liability scheme. Having failed to renew their Professional Standards Scheme with the PSC. The scheme currently covers 6963 members, providing an additional layer of security for a firm’s clients with limitation of liability for the provision of certain services. So what does that mean for your engagement letters?

It will take a minimum of six months from publication approval of a scheme to progress through statutory approvals and receive final establishment. In this instance, you’ll need to look to CPA for further information and recommendations.

What does this mean for CPA Australia members? We’ve condensed some of the FAQ’s from the CPA Australia website specifically around your engagement letters and what’s required of you to change and or update.

Do I need to remove disclosure statements from my engagement letters, stationery and website?

Yes – If the scheme ends on 7 October 2017 all disclosure notices will need to be removed on that date. Unfortunately, although a gap in continuity of CPA Australia’s professional standards scheme may only be for a short period of time, it is an offence under state / territory legislation to use a limited liability disclosure statement if a scheme does not exist. Early removal of any disclosure statement may result in a member not being covered under the existing scheme.

What if an engagement commenced when a professional standard scheme and liability coverage was in operation and continued after the scheme and cover has ended? What should I do?

You need to consider if there is any additional risk. In the unlikely event of a claim, you need to speak to your insurer/broker or seek independent legal advice.

How can I update my Ignition engagement letters to stay compliant?

Ignition allows you to create multiple engagement letter templates which you can use for different clients. You no longer have to manually edit your engagement letter each time you create a proposal. Ignition takes care of updating the client and service specific details for each engagement.

If you prefer to follow the steps in the app, click here. Otherwise click here to read our support article.

You can book a 1 to 1 meeting with your Customer Success Manager at Ignition to discuss this in more detail here.

In the event you need to speak with someone about your limited liability insurance and how to stay compliant we recommend speaking to CPA Australia. You can reach them on 1300 73 73 73.