What are your record retention rights?
Anne Janotta Erickson, MNCPA membership marketing team leader | December 2019/January 2020 Footnote
Clients and client records go hand in hand. But whose records are they? Yours or theirs?
Let’s turn to two sources for answers: Minnesota Statute 326A.13 and the AICPA Code of Professional Conduct Section 1.400.200.
Two sources? Why?
Both Minnesota statute and the AICPA Code of Professional Conduct offer guidelines for complying with client record retention requests.
But the AICPA’s version states that CPA practitioners must comply with the more restrictive rules and regulations set by their state’s board of accountancy. Failure to comply is seen as an ethics violation.
What does this mean for you? In short, you need to follow Minnesota Statute 326A.13 should a client request their records.
Statute summary, please
Per Minnesota Statute 326A.13, a CPA is obligated to comply with a client’s reasonable records request. This includes providing:
- A copy of the licensee’s working papers.
- Any accounting or other records belonging to, or obtained from or on behalf of, the client for their account.
Where things differ
It sounds straightforward, right? Well, yes and no. Separate guidelines also mean separate approaches to nuances related to record retention. The two biggies: outstanding fees and working papers.
In general, plan to follow Minnesota statute because its more restrictive language trumps the AICPA Code of Professional Conduct.
Curious how the two differ?
- Section 1.400.200.04: CPAs can withhold client records if fees are due for the specific work product.
- Minn. Statute 326A.13: CPAs cannot withhold client records for any reason.
- Section 1.400.200.04: Such documents are the member’s property and can be withheld from the client.
- Minn. Statute 326A.13: There is no difference between a CPA’s working papers and member-prepared client records. Therefore, a CPA must comply with a client’s record retention request.
Friendly fee dispute reminder
The Minnesota Board of Accountancy (BOA) cannot comment on and has no jurisdiction over fee disputes. But fee disputes can mask larger issues that do warrant further action. For this reason, it’s advised you contact the BOA first for guidance.
Individuals are also advised to contact legal counsel, small claims court or the Better Business Bureau regarding these matters.
The Minnesota BOA protects the public through rules that regulate the CPA profession. They can be reached at 651-296-7938 or www.boa.state.mn.us.
The MNCPA is here to help. Contact us at 952-831-2707 or email@example.com. Or visit www.mncpa.org/record-retention
for more information.
Are you forgetting something?
Renew and report by Dec. 31.
Ensure your CPA certificate is ready for 2020 by renewing and reporting to the Minnesota Board of Accountancy by year’s end.
- CPE reporting: Active CPAs must report for the reporting period of July 1, 2016, through June 30, 2019.
- Certificate renewal: All CPAs — active and inactive — must renew annually by Dec. 31.
Access more information at www.mncpa.org/renewal