Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What defines the accountant-client privilege?

1. It is less robust than attorney-client privilege

2. It allows for all disclosures without consent

3. It prevents third-party access without client consent

4. It universally applies to both written and verbal communication

The correct answer is: It prevents third-party access without client consent

The accountant-client privilege is a legal concept that helps protect the confidentiality of communications between accountants and their clients. The correct answer emphasizes that this privilege prevents third-party access to information shared between an accountant and their client, unless the client provides consent. This is crucial as it fosters a trusting relationship, allowing clients to discuss their financial matters openly, knowing that their information will remain confidential. In the context of privilege, the accountant-client privilege is designed to ensure that sensitive discussions and documents related to accounting services cannot be disclosed to outside parties without the client's explicit permission. This serves a similar purpose to that of attorney-client privilege, but the specifics and robustness can differ depending on jurisdiction. The other options do not accurately capture the essence of the privilege. While it's true that the accountant-client privilege is generally considered to be not as comprehensive as attorney-client privilege in some jurisdictions, this option does not address the key principle of confidentiality. Moreover, the privilege does not allow for all disclosures without consent, as this would undermine the trust integral to the client-accountant relationship. Lastly, while the privilege can cover both written and verbal communications, not all jurisdictions provide the same level of protection for different forms of communication, thus making a universal application inaccurate.