4.2 PRIVILEGED COMMUNICATIONS, CONFIDENTIALITY AND PRIVACY ACTS

Question 1

WHAT ARE THE RULES FOR CLIENT CONFIDENTIALITY DATA?

Answer 1

AN ACCOUNTANT MUST MAINTAIN THE CONFIDENTIALITY OF A CLIENT’S DATA AND, WITH LIMITED EXCEPTIONS, CANNOT PROVIDE IT TO THIRD PARTIES WITHOUT THE CLIENT’S PERMISSION.

FYI DISCLOSURE OF A CLIENT INFORMATION IS ALWAYS PERMITTED IF THE CLIENT CONSENTS.

A) SUBPOENA/ OR SUMMONS - COURT ORDERS
B) QUALITY CONTROL PEER REVIEW
C) COMPLY WITH LAWS AND REGULATIONS
D) INITIATE, PURSUE, OR DEFEND AGAINST ACTUAL OR POTENTIAL LAWSUITS.
E) INITIATE, OR RESPOND TO COMPLAINTS WITH AICPA ETHICS DIVISION OR TRIAL BALANCE
D) PERMIT ELECTRONIC PREPARATION OR SUBMISSION OF A CLIENT’S TAX RETURN
E) SECURE LEGAL ADVICE FROM AN ATTORNEY

SOME STATES HAVE ENACTED ACCOUNTANT CLIENT-PRIVILEGE STATUTES FOR CPA’S. IN THOSE STATES, THE PRIVILEGE CAN ALLOW A SUBPOENAED CPA TO REFUSE TO TESTIFY IN STATE COURT I.E., REFUSE TO HONOR A SUBPOENA FROM A COURT OR STATE TAX AUTHORITY.

Question 2

WHAT ARE CPA’S WORKING PAPERS?

Answer 2

A) ARE OWNED BY THE FIRM PERFORMING THE ACCOUNTING SERVICES
B) REFLECT COMPLIANCE WITH PROFESSIONAL STANDARDS
C) DOCUMENT WORK PERFORMED, AND CONCLUSIONS REACHED
D) MUST BE KEPT CONFIDENTIAL