Opinion ID: 1198969
Heading Depth: 1
Heading Rank: 3

Heading: The Board's Investigatory Powers And Duties

Text: In 1959 the General Assembly created the Board in order to insure that persons who hold themselves out as possessing professional qualifications as accountants are, in fact, qualified to render accounting services of a professional nature. Ch. 32, sec. 1, § 2-2-1, 1959 Colo. Sess. Laws 128 (now codified at § 12-2-101, 4 C.R.S. (1997)). In its present form, the statute governing the Board contains provisions for regulating and licensing CPAs. See § 12-2-101(1), 4 C.R.S. (1997). The Board consists of seven members, appointed by the governor, five of whom are CPAs. See § 12-2-103. The Board has the power and duty, among other matters, to issue, renew, revoke, or suspend certificates. See § 12-2-104. In addition, the Board has the power on its own motion or on the complaint of any person, to investigate CPAs accused of violating the provisions of the act. § 12-2-126(1)(a). In order to carry out this investigative authority, the legislature gave the board or any member thereof the power to issue subpoenas to compel the attendance of witnesses and the production of documents ... in connection with any investigation under this section. Id. In order to establish and maintain a high standard of integrity in the profession of public accounting, § 12-2-104(1)(c), the Board also has the power and duty to promulgate rules of professional conduct which govern and control every person practicing as a certified public accountant in the state. § 12-2-104(1)(c). Board rule 7.7 requires CPAs to comply with legally enforceable subpoenas. See Board of Accountancy Rules of Professional Conduct, Rule 7.7(B.)(2.), 3 C.C.R. 705-1 (1978 and as amended). The rule further provides that the submission of client information to the Board which is disclosed as part of the process of initiating a complaint with, or responding to an inquiry made by, the Board does not violate the rule's provision requiring confidentiality of client information. See Rule 7.7(B.)(5.). In the case before us, the Board used its subpoena power, invoking its rule requiring CPA compliance, in order to compel the production of documents by ZBR regarding its accounting work for the two casinos. In order to fully investigate the allegations raised by the letter, the Board considered review of this information to be necessary. As amicus American Institute of Certified Public Accountants (AICPA) puts it, at the center of almost any state board investigation into a CPA engagement will be the CPA's workpapers, for it is only through careful review of the workpapers that practice quality may be effectively assessed. Despite the essential nature of this information to the Board's inquiry and the Board rule requiring CPA compliance, ZBR refused to comply with the subpoena, asserting that Colorado's privilege statute requires client consent.