As with section 7216, the basis of the AICPA’s rule is that a CPA must obtain client consent before disclosing the client’s tax return information to third parties. AICPA Rule Interpretation 1.700. 040 presumes that confidentiality under the rule is threatened whenever a CPA uses a third-party service provider.
Are conversations with your accountants confidential?
The simple answer is “no,” not even close, unless a very narrow exception applies. Oregon common law does not recognize a privilege protecting the confidentiality of communications arising from the accountant-client relationship.
What happens if an accountant breaches client confidentiality?
Given the seriousness of the crime in this context and the “ultimate allegiance” to investors and creditors asserted by the court, accountants would be hard-pressed to demonstrate that greater damage results from breaching client confidentiality than from reporting a suspected fraud to outside parties.
What are the rules for confidentiality in accounting?
Accountants have traditionally asserted the right of confidentiality, which is articulated most plainly in Rule 301 of the AICPA Code of Professional Conduct (Confidential Client Information): A member in public practice shall not disclose any confidential client information without the specific consent of the client.
Is there an AICPA rule on client confidentiality?
The restricted nature of audit opinions, together with the American Institute of Certified Public Accountants’ (AICPA) client confidentiality rule, places the auditor in the position of having to choose between earning a livelihood or making a proper ethical choice.
When does client confidentiality need to be abolished?
This is not to say that client confidentiality should be abolished. On the contrary, pledges of confidentiality are critical when gathering full disclosures of company information, which can be sensitive and/or proprietary.
