Current through Reg. 49, No. 38; September 20, 2024
(a) Records.
(1) A person shall return original client
records to a client or former client within a reasonable time (promptly, not to
exceed 10 business days) after the client or former client has made a request
for those records. Original client records are those records provided to the
person by the client or former client in order for the person to provide
professional accounting services to the client or former client. Original
client records also include those documents obtained by the person on behalf of
the client or former client in order for the person to provide professional
accounting services to the client or former client and do not include the
electronic and hard copies of internal work papers. The person shall provide
these records to the client or former client, regardless of the status of the
client's or former client's account and cannot charge a fee to provide such
records. Such records shall be returned to the client or former client in the
same format, to the extent possible, that they were provided to the person by
the client or former client. The person may make copies of such records and
retain those copies.
(2) Unless the
person and the client have agreed in writing to the contrary:
(A) A person's work papers, to the extent
that such work papers include records which would ordinarily constitute part of
the client's or former client's books and records and are not otherwise
available to the client or former client, shall also be furnished to the client
within a reasonable time (promptly, not to exceed 20 business days) after the
client has made a request for those records. The person can charge a reasonable
fee for providing such work papers.
(B) Such work papers shall be in a format
that the client or former client can reasonably expect to use for the purpose
of accessing such work papers. The person is not required to convert records
that are not in electronic format to electronic format or to convert electronic
records into a different type of electronic format. However, if the client
requests records in a specific format, and the records are available in such
format within the person's custody and control, the client's request shall be
honored.
(C) The person is not
required to provide the client with proprietary formulas.
(D) The person is not required to provide the
client with other formulas unless the formulas support the client's accounting
or other records or the person was engaged to provide such formulas as part of
a completed work product.
(3) Work papers which constitute client
records include, but are not limited to:
(A)
documents in lieu of books of original entry such as listings and distributions
of cash receipts or cash disbursements;
(B) documents in lieu of general ledger or
subsidiary ledgers, such as accounts receivable, job cost and equipment
ledgers, or similar depreciation records;
(C) all adjusting and closing journal entries
and supporting details when the supporting details are not fully set forth in
the explanation of the journal entry; and
(D) consolidating or combining journal
entries and documents and supporting detail in arriving at final figures
incorporated in an end product such as financial statements or tax
returns.
(b)
Work papers. Work papers, regardless of format, are those documents developed
by the person incident to the performance of his engagement which do not
constitute records that must be returned to the client in accordance with
subsection (a) of this section. Work papers developed by a person during the
course of a professional engagement as a basis for, and in support of, an
accounting, audit, consulting, tax, or other professional report prepared by
the person for a client, shall be and remain the property of the person who
developed the work papers.
(c) For
a reasonable charge, a person shall furnish to his client or former client,
upon request from his client made within a reasonable time after original
issuance of the document in question:
(1) a
copy of the client's tax return; or
(2) a copy of any report or other document
previously issued by the person to or for such client or former client provided
that furnishing such reports to or for a client or former client would not
cause the person to be in violation of the portions of §
501.60 of this
chapter (relating to Auditing Standards) concerning subsequent
events.
(d) This rule
imposes no obligation on the person who provides services to a business entity
to provide documents to anyone involved with the entity except the authorized
representative of the entity.
(e)
Documentation or work documents required by professional standards for attest
services shall be maintained in paper or electronic format by a person for a
period of not less than five years from the date of any report issued in
connection with the attest service, unless otherwise required by another
regulatory body. Failure to maintain such documentation or work papers
constitutes a violation of this section and may be deemed an admission that
they do not comply with professional standards.
(f) Interpretive Comment: It is recommended
that a person obtain a receipt or other written documentation of the delivery
of records to a client.
(g)
Interpretive Comment: For the purposes of this rule, client records include:
(1) backup or working files of commercially
available software along with any passwords needed to access such files;
or
(2) client files from
commercially available tax return preparation software including any passwords
needed to access such files.
