WAC 4-25-640   What are the requirements concerning records and clients confidential information?  (1) Client: The term "client" as used throughout this section includes former and current clients. For purposes of this section, a client relationship has been formed when confidential information has been disclosed by a prospective client in an initial interview to obtain or provide professional services.

     (2) Property of the licensee: In the absence of an express agreement between the licensee and the client to the contrary, all statements, records, schedules, working papers, and memoranda made by a licensee incident to or in the course of professional service to clients, except reports submitted by a licensee, are the property of the licensee.

     (3) Sale or transfer of client records: No statement, record, schedule, working paper, or memorandum, including electronic records, may be sold, transferred, or bequeathed without the consent of the client or his or her personal representative or assignee, to anyone other than one or more surviving partners, shareholders, or new partners or new shareholders of the licensee, partnership, limited liability company, or corporation, or any combined or merged partnership, limited liability company, or corporation, or successor in interest.

     (4) Confidential client communication or information: A licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee must not without the consent of the client or the heirs, successors or personal representatives of the client disclose any confidential communication or information pertaining to the client obtained in the course of performing professional services.

     This rule does not:

     (a) Affect in any way a licensee's, CPA-Inactive certificateholder's, firm owner's, or employee of a licensee's obligation to comply with a lawfully issued subpoena or summons;

     (b) Prohibit disclosures in the course of a quality review of a licensee's attest services;

     (c) Preclude a licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee from responding to any inquiry made by the board or any investigative or disciplinary body established by law or formally recognized by the board. However, a licensee, CPA-Inactive certificateholder, firm owner, or employee of a licensee must not disclose or use to their own advantage any confidential client information that comes to their attention in carrying out their official responsibilities; or

     (d) Preclude a review of client information in conjunction with a prospective purchase, sale, or merger of all or part of a CPA's practice.

     (5) Client records: Licensees, CPA-Inactive certificateholders, and firm owners must furnish to their client or heirs, successors or personal representatives, upon request and reasonable notice:

     (a) A copy of the licensee's, CPA-Inactive certificateholder's or firm owner's records, schedules, and electronic documents, to the extent that such records and schedules would ordinarily constitute part of the client's records and are not otherwise available to the client; and

     (b) Any accounting or other records belonging to, or obtained from or on behalf of, the client, that the licensee, CPA-Inactive certificateholder, or firm owner removed from the client's premises or received for the client's account, including electronic documents; but the licensee, CPA-Inactive certificateholder, or firm owner may make and retain copies of such documents of the client when they form the basis for work done by the licensee, CPA-Inactive certificateholder, or firm owner.

     Licensees, CPA-Inactive certificateholders, and firm owners must not refuse to return client records, including electronic documents, pending client payment of outstanding fees.

     (6) Audit and review record retention requirements: For a period of seven years after a licensee concludes an audit or review the licensee must retain the following records and documents, including electronic records unless hard copies of such exist:

     (a) Records forming the basis of the audit or review;

     (b) Records documenting audit or review procedures applied;

     (c) Records documenting evidence obtained including financial data, analyses, conclusions, and opinions related to the audit or review engagement; and

     (d) Records documenting conclusions reached by the licensee in the audit or review engagement.



[Statutory Authority: RCW 18.04.055(2), 18.04.390 (4)(b) and18.04.405 (1). 05-01-137, § 4-25-640, filed 12/16/04, effective 1/31/05; 03-24-033, § 4-25-640, filed 11/25/03, effective 12/31/03. Statutory Authority: RCW 18.04.055(2). 02-22-082, § 4-25-640, filed 11/5/02, effective 12/31/02. Statutory Authority: RCW 18.40.055 [18.04.055]. 93-22-046, § 4-25-640, filed 10/28/93, effective 11/28/93.]