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CPA Mishaps: Ransoming Client Records

Often our firm receives questions from Certified Public Accounting (CPA) firms about the rules and regulations surrounding client accounting records. This blog offers legal answers to your CPA-related questions about client records. As always, we're happy to speak to you about your unique situation and recommend the advice of legal counsel if you received an administrative complaint.

Is a CPA in Florida obligated to turn over client records on request?

Yes. The Florida administrative code requires that a CPA must furnish upon a client request, whether present or former, copies of all records owned by the client, obtained from the client, obtained for the client, or created for the client.

This includes documents that a client did not specifically instruct the accountant to prepare, if they are related to the work the accountant was hired to do for the client, and if they are otherwise inaccessible to the client and would result in the client’s financial information being complete.

So, if a client or former client requests simply that all of their records be turned over, this includes documents they may not even know existed, and which you never intended to show them, as long as those documents are related to the issued work product.

For instance, an analysis of the client’s finances you created to refer back to and to get your co-workers up to speed on the status of the client’s accounts may fall within the scope of the rule, and an accountant may be required to turn over a copy of this as well.

Can a CPA condition the return of client records on payment for services rendered?

No. Not in Florida. In Florida, the duty of accountants to furnish records to clients and former clients upon request exists independently of the client’s contractual obligation to pay the accountant or any other obligation. Even if a client owes an accountant money, and the client is having difficulty extracting payment, an accountant still has the same duty to furnish records on the client. And even if either party terminates the agreement, a former client is likewise entitled to their records.

This is an important distinction between Florida law and the law of other states. In some states, an accountant is allowed to condition the return of client records on the payment of an outstanding bill. Not so in Florida. This distinction is a frequent pitfall for accountants who have relocated, or who practice in multiple states.

If you have not received payment you have earned, lawful debt collection remedies remain available to you, but withholding client records as a bargaining chip is not one of them. An accountant who is caught doing this may be subject to an administrative complaint which could result in the suspension of his or her license.

What should I do if I receive an administrative complaint?

A dispute over client records is likely to result in a CPA receiving an administrative complaint. Handled poorly, the consequences can be as serious as suspension of your license. But handled correctly, they can be as mild as a light fine, even if a violation has occurred. The most important thing you can do is to be proactive and seek the advice of a lawyer with experience in administrative law.

Need Legal Help? Let's Talk

Contact the law offices of Howell, Buchan & Strong, Attorneys at Law for your free consultation at any one of our locations:

Orlando (407) 717-1773 |Tallahassee (850) 877-7776 | Tampa (813) 833-6726 | Sarasota (941) 779-4348

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