Opinion ID: 1198969
Heading Depth: 1
Heading Rank: 4

Heading: The Accountant-Client Privilege

Text: The accountant-client privilege has existed in the state of Colorado since the legislature first codified it in 1929. See ch. 185, sec. 1, § 6563, 1929 Sess. Laws 642, 644 (now codified at § 13-90-107, 5 C.R.S. (1997)). In its current form, the relevant portion of the privilege reads as follows: (1) There are particular relations in which it is the policy of the law to encourage confidence and to preserve it inviolate; therefore, a person shall not be examined as a witness in the following cases: ... (f)(I) A certified public accountant shall not be examined without the consent of his client as to any communication made by the client to him in person or through the media of books of account and financial records or his advice, reports, or working papers given or made thereon in the course of professional employment; nor shall a secretary, stenographer, clerk, or assistant of a certified public accountant be examined without the consent of the client concerned concerning any fact, the knowledge of which he has acquired in such capacity. § 13-90-107(1)(f)(I), 5 C.R.S. (1997). This privilege statute places Colorado in line with the majority of jurisdictions which protect the confidentiality of communications between an accountant and a client. [3] By protecting the confidentiality of communications between an accountant and a client, the legislature intended to encourage full and frank communication between certified public accountants and their clients so that professional advice may be given on the basis of complete information, free from the consequences or the apprehension of disclosure. Neusteter v. District Court, 675 P.2d 1, 5 (Colo.1984). However, because testimonial privileges are exemptions from the general duty to testify, id., they are strictly and narrowly construed. See, e.g., Neusteter, 675 P.2d at 5; McNair v. District Court, 110 Nev. 1285, 885 P.2d 576 (1994) (per curiam). In the words of Wigmore: The investigation of truth and the enforcement of testimonial duty demand the restriction, not the expansion, of these privileges. They should be recognized only within the narrowest limits required by principle. Every step beyond these limits helps to provide, without any real necessity, an obstacle to the administration of justice. 8 John Henry Wigmore, Evidence in Trials at Common Law § 2192 (1961 & Supp.1997). [4] Recognizing that the accountant-client privilege should not be absolute in all circumstances, twenty-seven of the thirty states with a privilege or client confidentiality statute also provide an express exception for accountancy board investigations. [5] The Uniform Accountancy Act also contains an express exception to its confidentiality provisions for Board investigations. See Uniform Accountancy Act and Uniform Accountancy Act Rules, Third Edition, Standards for Regulation Including Substantial Equivalency, § 18 (American Inst. of Certified Pub. Accountants and National Ass'n of State Bds. of Accountancy 1998). States which have chosen to enact express exceptions to the accountant-client privilege have addressed a number of situations where the privilege does not apply. For example, New Mexico's statute provides that: nothing in this [confidentiality] section shall be construed as prohibiting the disclosure of information required to be disclosed by the standards of the public accounting profession in reporting on the audit, review or compilation of financial statements or as prohibiting disclosures in court proceedings, in investigations of an official nature, in proceedings pursuant to provisions of the Public Accountancy Act..., in ethical investigations conducted by private professional organizations or in the course of quality reviews. N.M. Stat. Ann. § 61-28A-24 (Michie 1993). The question here is whether we can read into Colorado's statute an equivalent exception or exceptions.