Preproposal statement of inquiry was filed as WSR 00-19-010.
Title of Rule: WAC 4-25-640 Clients' confidential information.
Purpose: To identify a CPA's obligations with respect to clients' confidential information.
Statutory Authority for Adoption: RCW 18.04.055(2).
Statute Being Implemented: RCW 18.04.055(2).
Summary: Prohibits a CPA from disclosing any confidential client information without the consent of the client; clarifies when the rule does not affect a CPA's disclosure of information, and outlines a CPA's obligations with respect to the records of a client.
Reasons Supporting Proposal: Clearly identifying a CPA's obligations with respect to clients' confidential information ensures fairness in interpretation and application of the rule for CPAs and addresses the legislative directive to protect the public.
Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Dana M. McInturff, CPA, 711 South Capitol Way, #400, Olympia, (360) 586-0163.
Name of Proponent: Board of Accountancy, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The rule incorporates parts of statute (RCW 18.04.390 and [18.04.]405) into the board's rules of professional conduct. The rule prohibits Washington CPAs from disclosing any confidential client information without the consent of the client; clarifies when the rule does not affect a CPA's disclosure of client information, and outlines a CPA's obligations with respect to the records of a client in a clear format. This standard of professional conduct is needed to protect the public by ensuring privacy and record accessibility. The goal of the amendment is to promote clarity; ensure effective communication; ensure fairness in interpretation and application of the rule; and promote efficiencies through minimizing gray areas.
Proposal Changes the Following Existing Rules: The amendment: (1) Changes the title of the rule to "What are a CPA's obligations with respect to clients' confidential information?"; (2) changes all references to "licensee" to "CPA"; and (3) is written in a clear rule-writing format.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rule will not have more than minor economic impact on business.
RCW 34.05.328 does not apply to this rule adoption. The Board of Accountancy is not one of the agencies required to submit to the requirements of RCW 34.05.328.
Hearing Location: Capitol Court Building, 110 Capitol Way South, 11th and Capitol Way, Room 135, Olympia, WA, on April 27, 2001, at 9:30 a.m.
Assistance for Persons with Disabilities: Contact Cheryl Sexton by April 20, 2001, TDD (800) 833-6384, or (360) 664-9194.
Submit Written Comments to: Dana M. McInturff, P.O. Box 9131, Olympia, WA 98507-9131, fax (360) 664-9190, by April 26, 2001.
Date of Intended Adoption: April 27, 2001.
March 15, 2001
Dana M. McInturff, CPA
AMENDATORY SECTION(Amending WSR 93-22-046, filed 10/28/93, effective 11/28/93)
WAC 4-25-640 ((
Clients' confidential information.)) What
are a CPA's obligations with respect to clients' confidential
(1) Confidential client communication. The term
"client" as used throughout this section shall include a former,
current, or prospective client. (( A licensee or any)) If you are
a CPA or a partner, officer, shareholder or employee of a
(( licensee shall not without the consent of the client or the
heirs, successors or personal representatives of the client))
firm, you must not disclose any confidential communication or
information pertaining to the client obtained in the course of
performing professional services without the consent of the
client or the heirs, successors or personal representative of the
This rule does not:
(a) Affect in any way a ((
licensee's)) CPA's obligation to
comply with a validly 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)) CPA's professional services; or
(c) Preclude a ((
licensee)) CPA 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)) CPA or any partner, officer, shareholder
or employee of a (( licensee)) firm shall not disclose or use to
their own advantage any confidential client information that
comes to their attention in carrying out their official
(2) Client records. ((
A licensee shall)) If you are a CPA,
you must furnish (( to his or her)) your client or the client's
heirs, successors or personal representatives, upon request and
(a) A copy of ((
the licensee's)) your working papers, to the
extent (( that such)) the 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
removed from the client's premises or received for the client's
account; but the licensee may make and retain copies of such
documents of the client when they form the basis for the work
done by the licensee)) you performed.
[Statutory Authority: RCW 18.40.055. 93-22-046, § 4-25-640, filed 10/28/93, effective 11/28/93.]