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9.25.15 graphic KJR Accountants Privilege and the Illinois Public Accounting Act M0718020xA6406

by: Kevin J. Richter

A recent Illinois Supreme Court case dealt with the application of the accountant’s privilege. The Illinois Public Accounting Act at 225 ILCS 450/27 provides that “A licensed or registered certified public accountant shall not be required by any court to divulge information or evidence which has been obtained by him in his confidential capacity as a licensed or registered certified public accountant. This Section shall not apply to any investigation or hearing undertaken pursuant to this Act.”

There has been much confusion as to who actually owns the accountant privilege.  The Supreme Court in Brunton v. Kruger concluded that the accountant’s privilege included in the Illinois Public Accounting Act is not part of a legislative created body of evidentiary privileges for other professionals, but rather is “an attribute of the accounting profession.”  The Supreme Court also ruled that the legislative scheme enacted to regulate the accounting profession did not fall under the common law “testamentary exception” which is used to defeat the attorney-client privilege.  The accountant privilege withstands the challenge of the “testamentary exception.” 

Since there is very little authority or case law interpreting the accountant’s privilege, this is a significant case.  A word of caution to CPAs, please consider the application of the privilege and guard against the unintended waiver of that privilege.  If a CPA is involved in an investigation concerning a client, it is wise to consultant with an attorney to avoid any unintended waiver of the privilege held by the accountant. 

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