PERMANENT RULES
Date of Adoption: October 25, 2002.
Purpose: To include firm owners in the confidentiality requirements and, while requiring CPAs to maintain information as confidential, ensure a client-relationship is not established by way of preengagement discussions with prospective clients.
Citation of Existing Rules Affected by this Order: Amending WAC 4-25-640 Clients' confidential information.
Statutory Authority for Adoption: RCW 18.04.055(2).
Adopted under notice filed as WSR 02-17-049 on August 15, 2002.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making:
New 0,
Amended 0,
Repealed 0;
Pilot Rule Making:
New 0,
Amended 0,
Repealed 0;
or Other Alternative Rule Making:
New 0,
Amended 1,
Repealed 0.
Effective Date of Rule:
December 31, 2002.
October 29, 2002
Dana M. McInturff, CPA
Executive Director
OTS-4976.3
AMENDATORY SECTION(Amending WSR 93-22-046, filed 10/28/93,
effective 11/28/93)
WAC 4-25-640
Clients' confidential information.
(1) The
term "client" as used throughout this section includes former
and current clients. For purposes of this section, a client
relationship has been formed when confidential information has
been disclosed by a prospective client in an initial interview
to obtain or provide professional services.
(2) Confidential client communication. ((The term
"client" as used throughout this section shall include a
former, current, or prospective client.)) A licensee ((or any
partner, officer, shareholder)), firm owner, or employee of a
licensee ((shall)) must not without the consent of the client
or the heirs, successors or personal representatives of the
client disclose any confidential communication or information
pertaining to the client obtained in the course of performing
professional services.
This rule does not:
(a) Affect in any way a licensee's, firm owner's, or
employee's obligation to comply with a ((validly)) lawfully
issued subpoena or summons ((enforceable by order of a
court)); ((or))
(b) Prohibit disclosures in the course of a quality
review of a licensee's ((professional)) attest services;
((or))
(c) Preclude a licensee, firm owner, or employee from
responding to any inquiry made by the board or any
investigative or disciplinary body established by law or
formally recognized by the board. However, a licensee ((or
any partner, officer, shareholder)), firm owner, or employee
of a licensee ((shall)) must not disclose or use to their own
advantage any confidential client information that comes to
their attention in carrying out their official
responsibilities; or
(d) Preclude a review of client information in conjunction with a prospective purchase, sale, or merger of all or part of a CPA's practice.
(((2))) (3) Client records. ((A licensee shall))
Licensees and firm owners must furnish to ((his or her)) their
client or heirs, successors or personal representatives, upon
request and reasonable notice:
(a) A copy of the licensee's or firm owner's working papers, including electronic documents, to the extent that such working papers include records that would ordinarily constitute part of the client's records and are not otherwise available to the client; and
(b) Any accounting or other records belonging to, or obtained from or on behalf of, the client, that the licensee or firm owner removed from the client's premises or received for the client's account, including electronic documents; but the licensee or firm owner may make and retain copies of such documents of the client when they form the basis for work done by the licensee or firm owner.
Licensees and firm owners must not refuse to return client records, including electronic documents, pending client payment of outstanding fees.
[Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-640, filed 10/28/93, effective 11/28/93.]