Question

According to California law, when is an accountant allowed to disclose confidential information? How does this differ from the AICPA standards?

Answer 1

Under the California Law, the accountant is allowed to disclose the confidential information of the client when the accountant reasonably believes that disclosure of confidential information is necessary to prevent a criminal act. In addition, the accountant reasonably believes that the criminal act is likely to result in the death or substantial injury to an individual.

Further, as per AICPA standards, the accountant is allowed to disclose confidential informations in connection with the investigative or disciplinary proceedings by the professional ethics division or trial Board of the Institute or a duly constituted investigative or disciplinary body of a State CPA society or Board of Accountancy. Further, the confidential information can also be disclosed in connection with professional practice reviews under AICPA or State CPA society or Board of Accountancy authorization.

Thus, while California Law allows discloure of confidential information in order to prevent death or injury to an individual, AICPA law allows discloure of confidential information under Investigations or discliplinary proceedings.