Comments by Richard Miller . Attorneys hired by accounting firms do not practice law or hold themselves out as attorneys. CPA firms are hiring law school graduates, but are not always requiring that they be licensed to practice law. Regarding client confidentiality, Mr. Miller explained that 15 states have privilege statutes for CPAs. Section 7525 of the Internal Revenue Code provides for a federal tax preparer privilege.
Confidentiality is also a requirement by rules promulgated by each state board of accountancy.
Mr. Miller explained that some lawyers have mis-analyzed an accountant's duty regarding disclosure of client information. Even if a client is engaged in fraudulent conduct, a CPA cannot disclose such client fraud to anyone. Rather, the CPA is ethically required to resign from the engagement or file an adverse or qualified opinion. Accounting firms which do audit work for publically held corporations are subject to the SCC's rules. Also, these auditor independence rules require the accounting firms to disclose fees paid to them for both auditing and consulting services as well as other non-audit services for the principal auditor.