Mike Colgan, the new Executive Director and CEO of the Pennsylvania Institute of Certified Public Accountants, has recently brought an issue to my attention.  The issue is that when CPA’s provide documents to the State Board of
Accountancy during a license investigation some of those documents are being made available to the public.  This
is despite the fact that some of these documents may be protected by the accountant client privilege.  Without going through all the prosecutions by the Board, there is no way to know how often client documents are being made available to the public.  However, I looked at nine of the most recent licensing violations.  Of those nine, three of the consent orders had what appeared to be confidential client documents attached and therefore available to the public. 
Of these three, only one of the CPAs (or their attorney) thought to have the documents redacted with their client’s identifying information removed.
 
In Pennsylvania the CPA Law provides an accountant client privilege.  However providing documents to the Board in a licensing investigation is an exception to the privilege.  Therefore, ethically a CPA can provide any documents requested by the Board.  There is no guidance in the statute as to what the Accountancy Board can do with them. 
It turns out in some cases they attach them as exhibits to the consent orders and make them available to anyone who asks to see the disciplinary history! While there is no ethical problem with this for the CPA it certainly has the potential for a client problem if the client discovers that their tax returns or audit paperwork are available to the general public.  Certainly if the client is harmed in some way by this information leaking out they would have a cause of action to sue the CPA.  The client could claim that this was a foreseeable result of the CPA releasing this information without any protection to the client.  Without addressing the merits of such a claim, which I believe should be vigorously defended, no CPA wants to be sued in the first place or have to deal with a lawsuit, the costs or the aggravation.
 
There is a simple fix. When asked by the investigator or any representative of the Board to provide any client documents, redact all client identifying information.   Name, address, social security or tax identification numbers and phone numbers all should be removed.  They can be whited out or blacked out with a permanent marker.  It will be obvious that information was removed and that’s ok.  Don’t remove anything other than the client identifying information.  I even recommend that when you provide the documents to the Board your cover letter indicates that you have removed all client identifying information, and if there is anything you missed, that information should also be removed before any of the documents are made available to the public.
 
The Accountancy Board should have no problem with this.  If they do you should contact an attorney before turning over any documents and your attorney should be able to convince them that the redacted documents will serve their
purposes.  (Frankly, your license is too important not to have the advice of counsel in a license investigation or
prosecution anyway.)
 
 While I don’t know if this may be an issue for any other profession with a recognized privilege but I can’t imagine that any of the medical boards are publishing patient’s medical records so it is unlikely.  However, keep in mind that if your profession has a privilege you can (and probably should) always redact the client identification information unless it somehow relates to the prosecution’s case.  
  
At this point the PICPA will attempt to address this issue with the Accountancy Board, its counsel and the prosecutors in an effort to make certain that they all understand that this is a serious issue for CPAs.  We will try to stop this practice of making unredacted documents available even in the circumstances where the CPA
fails to redact the information. Hopefully, a little education will go a long way to alleviate this problem.  
 


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