New AICPA Interpretation Proposed on Disclosing Client Information
The American Institute of Certified Public Accountants’ (“AICPA”) Professional Ethics Executive Committee has issued an exposure draft that proposes a new interpretation of a confidentiality rule concerning the disclosure of confidential client information. Per the rule, an AICPA member is not allowed to share a client’s confidential information without the client’s specified consent. There are exceptions to gaining specific client consent, such as for members who obtain a practice review authorized under the AICPA, a state CPA society, or Board of Accountancy.
As currently written, the standard does not clarify whether the exceptions to the rule extends to quality reviews. In response, the proposal requires members not to conduct quality reviews to their advantage or share any information received during the review process. Members who obtain such reviews also should be content with the disclosure requirements under Internal Revenue Code Section 7216 or Treas. Reg. 7216 being met and add more safeguards when necessary.
Comments on the Exposure Draft, Proposed Interpretation of the AICPA Code of Professional Conduct: Disclosing Client Information In Connection With a Quality Review, are due Monday, August 20. If the proposal is adopted, the effective date would be the last day of the month in which it is published in the Journal of Accountancy.