Source: http://caselaw.findlaw.com/us-supreme-court/507/761.html
Timestamp: 2017-02-26 01:47:56
Document Index: 654251491

Matched Legal Cases: ['§ 7', '§ 9', '§ 1', '§ 5', '§ 6', '§ 10']

EDENFIELD v. FANE | FindLaw
EDENFIELD v. FANE, (1993)
Argued: December 7, 1992 Decided: April 26, 1993
The rule, according to Fane's uncontradicted submissions, presented a serious obstacle, because most businesses are willing to rely for advice on the accountants or CPA's already serving them. In Fane's experience, persuading a business to sever its existing accounting relations or alter them to include a new CPA on particular assignments requires the new CPA to contact the business and explain the advantages of a change. This entails a detailed discussion of the client's needs and the CPA's expertise, services and fees. See Affidavit of Scott Fane §§ 7, 11, App. 11, 15.
Fane sued the Board in the United States District Court for the Northern District of Florida, seeking declaratory and injunctive relief on the ground that the Board's anti-solicitation rule violated the First and Fourteenth Amendments. Fane alleged that, but for the prohibition, he would seek clients through personal solicitation and would offer fees below prevailing rates. Complaint §§ 9-11, App. 3-4.
The Board's second justification for its ban - the need to maintain the fact and appearance of CPA independence and to guard against conflicts of interest - is related to the audit and attest functions of a CPA. In the course of rendering these professional services, a CPA reviews financial statements and attests that they have been prepared in accordance with generally accepted accounting principles and present a fair and accurate picture of the firm's financial condition. See generally R. Gormley, Law of Accountants and Auditors § 1.074. (1981); 1 American Institute of Certified Public Accountants, Professional Standards AU 110.01 (1991) (hereinafter AICPA Professional Standards). In the Board's view, solicitation compromises the independence necessary to perform the audit and attest functions, because a CPA who needs business enough to solicit clients will be prone to ethical lapses. The Board claims that even if actual misconduct does not occur, the public perception of CPA [507 U.S. 761, 770]
The solicitation here poses none of the same dangers. Unlike a lawyer, a CPA is not "a professional trained in the art of persuasion." A CPA's training emphasizes independence and objectivity, not advocacy. See 1 AICPA Professional Standards AU 220; 2 id. ET 55; H. Magill & G. Previts, CPA Professional Responsibilities: An Introduction 105-108 (1991). The typical client of a CPA is far less susceptible to manipulation than the young accident victim in Ohralik. Fane's prospective clients are sophisticated and experienced business executives who understand well the services that a CPA offers. See Affidavit of Scott Fane §§ 5-7, 10(A), App. 10-11, 13. In general, the prospective client has an existing professional relation with an accountant, and so has an independent basis for evaluating the claims of a new CPA seeking professional work. Id., § 6, App. 10-11.
If a prospective client does decide to meet with Fane, there is no expectation or pressure to retain Fane on the spot; instead, he or she most often exercises caution, checking references and deliberating before deciding to hire a new CPA. See Affidavit of Scott Fane § 10(C), App. 13-14. Because a CPA has access to a business firm's most sensitive financial records and internal documents, retaining a new accountant is not a casual decision. Ibid. The engagements Fane seeks are also longterm in nature; to the extent he engages in unpleasant, high pressure sales tactics, he can impair, rather than improve, his chances of obtaining an engagement or establishing a satisfactory professional relation. The importance of repeat business and referrals gives the CPA a strong incentive to act in a responsible and decorous manner when soliciting business. In contrast with Ohralik, it cannot be said that, under these circumstances, personal solicitation by CPA's "more often than not will be injurious to the person solicited." Ohralik, 436 U.S., at 466
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