CPA-Client Privelege Being Challenged in Colorado
Legislation was drafted to allow the State Board the ability to investigate complaints and to go after "rogue" and incompetent CPAs in their efforts to protect the public.
Supporters of the bill indicate that the State Board needs the ability to access client files to investigate complaints or substandard work by CPAs in the state. Without the legal right, confidence in audited financial statements would diminish.
Opponents of the bill contend that privacy rights would be eroded and that passage of the bill would greatly weaken the privelege that protects CPA-client confidentiality.
The issue has been raised again as the board demanded that the CPA firm of Zaveral Boosalis Raisch hand over client files as part of their investigation, initiated after the board received an anonymous letter. The firm asked its client who subsequently refused, and the firm denied the board's request.
A partner in the firm, Frank Zaveral  concurs that client consent is not a requirement in cases of fraud and criminal activity, and urges "If we are to make a mistake, let's make a mistake on the side of privacy."
(Download an issues paper  written by Mr. Zaveral for the Independence Institute outlining the possible effects of all the critical issues that this privacy fight raises.)
What are your thoughts on this issue? Please share by ADDING USER COMMENTS below.