PRINTER'S NO. 1815
No. 1349 Session of 2002
INTRODUCED BY KUKOVICH, MELLOW, O'PAKE, WAGNER, MUSTO, STOUT,
KASUNIC, FUMO, BODACK, BOSCOLA, COSTA, HUGHES, KITCHEN,
LAVALLE, LOGAN, SCHWARTZ, STACK, TARTAGLIONE, A. WILLIAMS,
C. WILLIAMS AND WOZNIAK, MARCH 20, 2002
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
MARCH 20, 2002
AN ACT
1 Amending the act of May 26, 1947 (P.L.318, No.140), entitled, as
2 amended, "An act relating to the practice of public
3 accounting; providing for the examination, education and
4 experience requirements for certification of certified public
5 accountants and for the licensing of certified public
6 accountants, public accountants and firms; requiring
7 continuing education and peer review; providing for the
8 organization and ownership of firms and for the procedures
9 and grounds for discipline and reinstatement of licensees;
10 prescribing the powers and duties of the State Board of
11 Accountancy and the Department of State; providing for
12 ownership of working papers and confidentiality; regulating
13 the professional responsibility of licensees; defining
14 unlawful acts and acts not unlawful; providing penalties; and
15 repealing existing laws," further providing for privileged
16 communications; and providing for obligation to report
17 wrongdoing, for protection of certified public accountants
18 and accountants, for enforcement and for penalties.
19 The General Assembly of the Commonwealth of Pennsylvania
20 hereby enacts as follows:
21 Section 1. Section 11.1 of the act of May 26, 1947 (P.L.318,
22 No.140), known as the CPA Law, reenacted and amended December 8,
23 1976 (P.L.1280, No.286) and amended December 4, 1996 (P.L.851,
24 No.140), is amended to read:
1 Section 11.1. Privileged Communications.--Except by
2 permission of the client engaging him or the heirs, successors
3 or personal representatives of a client, a licensee or a person
4 employed by a licensee shall not be required to, and shall not
5 voluntarily, disclose or divulge information of which he may
6 have become possessed unless the sharing of confidential
7 information is within the peer review process. This provision on
8 confidentiality shall prevent the board from receiving reports
9 relative to and in connection with any professional services as
10 a certified public accountant, public accountant or firm. The
11 information derived from or as the result of such professional
12 services shall be deemed confidential and privileged. Nothing in
13 this section shall be taken or construed as prohibiting the
14 disclosure of information required to be disclosed under section
15 11.2 or by the standards of the profession in reporting on the
16 examination of financial statements, or in making disclosures in
17 a court of law or in disciplinary investigations or proceedings
18 when the professional services of the certified public
19 accountant, public accountant or firm are at issue in an action,
20 investigation or proceeding in which the certified public
21 accountant, public accountant or firm is a party.
22 Section 2. The act is amended by adding sections to read:
23 Section 11.2. Obligation to Report Wrongdoing.--A certified
24 public accountant and accountant shall be obligated to report to
25 the appropriate Federal, State or local government authorities
26 wrongdoing discovered during employment. To the extent that a
27 good faith report of wrongdoing is made by a certified public
28 accountant or accountant, the certified public accountant or
29 accountant shall be entitled to introduce the report of
30 wrongdoing in defense of any action brought against the
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1 certified public accountant or accountant claiming that the
2 certified public accountant or accountant permitted wrongdoing
3 to occur.
4 Section 11.3. Protection of Certified Public Accountants and
5 Accountants.--(a) No employer or client may discharge, threaten
6 or otherwise discriminate or retaliate against a certified
7 public accountant or an accountant regarding the certified
8 public accountant's or accountant's compensation, terms,
9 conditions, location or privileges of employment because the
10 certified public accountant or accountant or a person acting on
11 behalf of the certified public accountant or accountant makes a
12 good faith report or is about to report wrongdoing as required
13 under section 11.2.
14 (b) No employer or client may discharge, threaten or
15 otherwise discriminate or retaliate against a certified public
16 accountant or an accountant regarding the certified public
17 accountant's or accountant's compensation, terms, conditions,
18 location or privileges of employment because the certified
19 public accountant or accountant is requested by an appropriate
20 authority to participate in an investigation, hearing or inquiry
21 held by an appropriate authority, or in a court action, arising
22 out of a report filed by a certified public accountant or
23 accountant under section 11.2.
24 (c) No client may discharge, threaten or otherwise
25 discriminate or retaliate against a certified public accountant
26 or an accountant for complying with section 11.2 or for
27 complying with a request by an appropriate authority to
28 participate in an investigation, hearing or inquiry held by an
29 appropriate authority, or in a court action, arising out of a
30 report filed by a certified public accountant or accountant
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1 under section 11.2.
2 (d) A person who alleges a violation of this section may
3 bring a civil action in a court of competent jurisdiction for
4 appropriate injunctive relief or damages, or both, within one
5 hundred eighty days after the occurrence of the alleged
6 violation.
7 (e) A certified public accountant or accountant alleging a
8 violation of this section must show by a preponderance of the
9 evidence that, prior to the alleged reprisal, the certified
10 public accountant or accountant or a person acting on behalf of
11 the certified public accountant or accountant had reported or
12 was about to report in good faith, verbally or in writing, an
13 instance of wrongdoing to the appropriate authority.
14 (f) It shall be a defense to an action under this section if
15 the defendant proves by a preponderance of the evidence that the
16 action by the employer or client occurred for separate and
17 legitimate reasons, which are not merely pretextual.
18 (g) A court, in rendering a judgment in an action brought
19 under this section, shall order, as the court considers
20 appropriate, reinstatement of the certified public accountant or
21 accountant, the payment of back wages, full reinstatement of
22 fringe benefits and seniority rights, actual damages or any
23 combination of these remedies. A court may also award the
24 complainant all or a portion of the costs of litigation,
25 including reasonable attorney fees and witness fees, and
26 punitive damages, if the court determines that the award is
27 appropriate.
28 (h) A person who, under color of an employer's or client's
29 authority, violates this section shall be liable for a civil
30 fine of not more than one thousand dollars ($1,000).
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1 (i) For purposes of this section, "retaliation" means the
2 termination or severing of any relationship as a consequence of
3 the one providing the accounting services reporting to the
4 government authority alleged wrongdoing by the accountant's
5 client.
6 Section 3. This act shall take effect in 60 days.
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