Exam 9: Confidentiality

Before disclosing confidential information, a CPA generally must obtain client consent. This consent must be:

CPAs who are full-time employees of a corporation and focus on the preparation of earnings forecasts and projections invariably learn confidential information about their employer's future prospects. Is such an employee subject to the duty of confidentiality?

The FBI is trying to locate a suspected terrorist. Law enforcement authorities believe that this terrorist currently holds a job and, therefore, has had payroll taxes withheld from his paycheck. Also, this suspected terrorist would have received a W-2 payroll statement form from his employer that references his last-known address. The FBI has asked the IRS to cooperate by disclosing the name of the employer and the last known address of this suspected terrorist. Can the IRS disclose this information?

What types of information are protected by a professional accountant's duty of confidentiality?

The duty of confidentiality applies to:

A CPA cannot be held liable for violating the duty of confidentiality if:

The duty of confidentiality arises when:

A CPA's client base includes both publicly traded corporations and smaller privately-owned clients. Some of these clients require audits, and others only require bookkeeping and tax compliance services. If the CPA wishes to sell her professional practice to another CPA firm, she may disclose to the prospective buyer information concerning:

A CPA violates the duty of confidentiality if, without obtaining client consent, she discloses potentially embarrassing client information to:

A CPA' duty of confidentiality ends when:

A client called a CPA at her home one evening to discuss an urgent matter. The client called at a time when the CPA was eating dinner with her family. Due to the unexpected and potentially urgent nature of the call, the CPA answered the phone call while sitting at the dinner table. As a consequence, some of the CPA's family members overheard key aspects of the phone call. Did the CPA violate the duty of confidentiality?

A CPA may utilize information obtained during the course of a professional accountant-client relationship for personal gain:

A CPA wants to understand the difference between the duty of confidentiality and the accountant-client privilege. She lives in a state in which an accountant-client privilege has been enacted. A key difference between the duty of confidentiality and the accountant-client privilege is that:

In accordance with the duty of confidentiality, when is client information considered to be confidential?

When should a tax advisor encourage a client to seek legal advice?

A client wants to discuss with its CPA some of the valuation and accounting issues associated with maintaining a proprietary business process as a trade secret rather than obtaining a patent for it. Patents are granted by the United States Patent Office. As a result:

The duty of confidentiality applies to:

If a CPA violates the duty of confidentiality, who may hold it accountable?

During the course of working on a complex project, a client shared confidential information with its CPA. The CPA did a superb job, but the client, however, has never paid the CPA for her services. The CPA anticipates that, if she initiates a lawsuit to collect the amount due, the client will claim that the task was simple and the CPA's performance was below standard. If the CPA wants to introduce the nature of the work done as evidence in her court action to collect unpaid fees:

Is there a federal accountant-client privilege? What does it cover?