Already covered: CPAs exempt from Gramm-Leach-Bliley Act's privacy notice.

• Author: Allen, Bruce C.
• Position: Governmentrelations - Certified public accountants

President Bush signed a bill Oct. 13 that exempts CPAs from the Gramm-Leach-Bliley Act's requirement that they send their clients an annual privacy notice.

The AICPA has been working to amend the law since it was enacted in 1999. The bill became effective immediately upon the president's signature.

The exemption reads:

"(d) Exemption for Certified Public Accountants--

"(1) IN GENERAL -- The disclosure requirements of subsection (a) do not apply to any person, to the extent that the person is--

"(A) a certified public accountant;

"(B) certified or licensed for such purpose by a State; and

"(C) subject to any provision of law, rule, or regulation issued by a legislative or regulatory body of the State, including rules of professional conduct or ethics, that prohibits disclosure of nonpublic personal information without the knowing and expressed consent of the consumer.

"(2) LIMITATION -- Nothing in this subsection shall be construed to exempt or otherwise exclude any financial institution that is affiliated or becomes affiliated with a certified public accountant described in paragraph (1) from any provision of this section."

CPAs Already Under Client Confidentiality Requirement

The exemption is possible because CPAs and CPA firms already are required under state law--and ethical standards--to maintain the confidentiality of client information.

Indeed, California's Accountancy Act and supporting regulations require CPAs to maintain client confidentiality unless:

* the client gives written permission for the disclosure or

* the reason for the disclosure falls into one of the allowable exemptions, such as peer review, consultation with a colleague, sale of practice, subpoena, etc.

For the specific language, see Regulations 54, 54.1, 54.2 at www.dca.ca.gov/cba.

Passage of this exemption, "... is wonderful news and a win for both CPA practitioners and their clients. The disclosure statements are often confusing to clients and they are expensive and time-consuming for CPAs to prepare," said Barry C. Melancon, AICPA president and CEO.

"Since the exemption is effective upon the president's signature, all those CPAs who are now preparing this year's privacy notices can stop. They won't have to send Gramm-Leach-Bliley Act privacy notices out this year. They can instead put that time into serving their clients."

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