Accountant-Client Privilege; Accountant’s Right to Retain Data

No confidential accountant-client privilege exists under common law.  However, several states have now adopted the privilege by statute and some statutes explicitly permit disclosure in judicial proceedings.  The federal courts follow common law in matters involving “federal question” jurisdiction or federal administrative proceedings, rather than state statutes creating an accountant-client privilege.  However, in diversity jurisdiction cases the courts apply state law, usually the law of the state in which the court sits.

Working papers, drafts, notes, calculations, and typed final accounts created by an accountant in the course of auditing a client’s account and ascertaining its tax liability is the property of the accountant.   Nevertheless, the ownership of work product of an accountant is determined by the contractual relation under whom the professional services are rendered.  If the accountant is an employee, the ownership vests in the employer, but if s/he is an independent contractor, ownership vests in the accountant.

Inside Accountant-Client Privilege; Accountant’s Right to Retain Data