Certified Public Accountants in Texas must adhere to the rules and regulations set forth by statute and by the Texas State Board of Public Accountancy (BPA). The BPA was created to protect the public. In furtherance of its mission, the Board places several rules and regulations on maintaining client records.
Failure to comply with the BPA rules may lead to disciplinary action against the licensee.
Maintaining Client Records: Five Years
CPAs must keep certain documents for five years.
Documents prepared by a CPA firm supporting an attest service belong to the accountancy firm who prepared them. The BPA rules require the CPA firm to maintain “work documents required by professional standards for attest services” for five years from the date of any report issued in connection with the attest service, “unless otherwise required by another regulatory body.” 22 Tex. Admin. Code § 501.76(e). The IRS, other taxing authorities, or other regulatory bodies may have additional record retention rules that CPA firms must follow.
The BPA has not established record maintenance regulations for services beyond attest services completed by CPA firms. Documents can be maintained in paper or electronic format. Failure to maintain documents and work papers subject to this rule constitutes a violation “and may be deemed an admission that they do not comply with professional standards.” 22 Tex. Admin. Code § 501.76(e).
Know that “clients records” encompasses more than stacks of paper in manila file folders. Under the BPAs subchapter on Responsibility to Clients, client records also include:
- Backup or working files of commercially available software along with any passwords needed to access such files, or
- Client files from commercially available tax return preparation software including any passwords needed to access such files. 22 Tex. Admin. Code § 501.76(g).
Returning Client Records: Within 10 Days of Request
A CPA “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 makes a request for those records. 22 Tex. Admin. Code § 501.76(a). Original client records are the documents given to the CPA by the client and documents obtained by the CPA on behalf of the client. No fee may be charged to provide these records.
Internal work papers that include records that constitute part of the client’s books and are not otherwise available to the client, must 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.” 22 Tex. Admin. Code § 501.76(a)(2)(A). The CPA can charge a reasonable fee for providing such work papers.
A complete list of the rules pertaining to Records and Work Papers can be read here.
Allegations of Professional Misconduct: Defending Your CPA License
If you are under investigation by the Texas State Board of Public Accountancy for allegations of professional misconduct, BERTOLINO LLP can help. We are experienced professional license defense attorneys. We help professionals, like you, keep their licenses when those licenses are under attack by a state agency or board.
BERTOLINO LLP represents licensed professionals across the entire State of Texas. To best serve our clients we have offices in Austin, Houston, and San Antonio. Our honest, experienced attorneys will fight aggressively on behalf of your CPA license and reputation.
Contact us today or call (512) 717-5432 and schedule a case evaluation.
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