California Code of Regulations › Title 16 - Professional and Vocational Regulations › Division 1 - State Board of Accountancy › Article 9 - Rules of Professional Conduct › Section 54.3 - Sale or Transfer of Licensee's Practice

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A licensee that sells or transfers all or part of the
				  licensee's practice to another person ("successor person"), as defined in
				  section
				  5035
				  of the Business and Professions Code, and will no longer retain any ownership
				  in the practice shall comply with all of the following:
(a) Send a written notice regarding the sale
				or transfer of the practice to each client that is subject to the sale or
				transfer. The notice shall be sent via first-class or certified mail to the
				last known address of the client, or via electronic transmission as provided in
				this section. The notice shall contain, at a minimum, the following: a request
				for the client's consent to transfer that client's records to the successor
				person, and a notice that the client's consent will be presumed if the client
				does not notify the licensee that the client objects within 90 days from the
				date of the written notice. The licensee may not transfer any client records to
				the successor person until either the client's consent is obtained, or the 90
				days has lapsed without any objection from the client, whichever is shorter.
				The licensee is required to retain a copy of the written notice, and any
				document reflecting the client's consent or objection to the transfer of that
				client's records, in either written or electronic format, for not less than
				four years from the date of sale or transfer of the licensee's practice. Any
				written or electronic copy of the notice specified in this section, and any
				document reflecting the client's consent or objection shall be a legible,
				complete, and accurate reproduction of the original business record;
(b) If a client objects to the transfer of
				their records to the successor person, the licensee shall return any client
				records without delay, or as agreed upon with the client; and,
(c) With respect to client records not
				subject to the sale or transfer, a licensee shall return any client records
				without delay, or as agreed upon with the client.
(d) If the licensee is unable to contact a
				client, that client's records shall not be transferred, and shall be retained
				by the licensee for a period of not less than four years from the date of sale
				or transfer of the licensee's practice, or if the client's records include
				audit documentation as defined in section
				68.2, for the time period set by
				section 68.3, whichever is longer. A
				notice returned to the licensee, either by mail or electronic transmission,
				would demonstrate that the attempt to contact the client was
				unsuccessful.
(e) After the
				retention period indicated in subdivision (d), the licensee shall dispose of or
				arrange for the disposal of client records that are no longer to be retained by
				the licensee by shredding, erasing, or otherwise modifying the personal
				information in those records to make the records unreadable or undecipherable
				through any means.
(f) For the
				purposes of this section, "electronic transmission" means the transmission of a
				document by electronic means to the electronic mail address at or through which
				a client has authorized or consented to such communication method. Proof of
				such authorization and consent for electronic transmission shall be
				demonstrated through a written confirmation of such agreement from the client.
				As part of that agreement, at the time of giving consent to electronic
				transmission, the client shall provide their electronic mail address for the
				purpose of receiving electronic notice or documents from the
				licensee.
(g) "Client records"
				shall have the meaning set forth in section
				68 and shall include working
				papers as defined in section
				68.1 if considered part of the
				client's records as specified by section
				68.
Note: Authority cited: Sections
					 5010
					 and
					 5018,
					 Business and Professions Code. Reference: Sections
					 5018
					 and
					 5063.3,
					 Business and Professions Code; and Section
					 1798.81, Civil
					 Code.