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CPAs as custodians of client records

Written on May 1, 2020

When cloud-based accounting solutions have become the norm, it can be even trickier to determine when a CPA has “custody” of client records.

“A CPA serving as custodian of client records presents multiple considerations under the ethics rules of the profession,” writes Laura Hay, CPA, in the September/October issue of CPA Voice. “Most recently, an AICPA ethics interpretation addressing independence for a CPA providing data hosting services (ET 1.295.143, Hosting Services,) became effective July 1, 2019.”

Further complicating matters, she writes, is when there is a change in the CPA practice, leading to questions about the disposition of client records.

When a CPA sells or transfers a practice and will no longer retain any ownership in the practice, the CPA is required send a written request to each client requesting the client’s consent to transfer its files to the successor firm and returning any client records, among other requirements.

To learn more about CPAs as custodians of client records, read the article now.

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September/October 2019 exam