Academic journal article Journal of Accountancy

Only the Client Is Entitled to Accountant's Reports

Academic journal article Journal of Accountancy

Only the Client Is Entitled to Accountant's Reports

Article excerpt

A Massachusetts superior court ruled that an accounting firm is required to provide its work product only to its actual client.

This case arose from a divorce proceeding between Vanda Cacciola and her estranged husband, Luciano Manganella. Each of them owned a 50% stake in jasmine Company, a business whose assets were to be distributed under the divorce action. Cacciola alleged that Manganella was siphoning assets from Jasmine Company, and she requested financial information concerning the company from Saul Goldberg of Levenson, Goldberg and Co., the company's accountants. Goldberg refused to produce the information that Cacciola requested.

Cacciola then brought an action against the firm seeking initinctive rehef and damages. She claimed the firm had a professional duty to provide her with certain financial information regarding Jasmine.

In ruling for the defendant, the court said that according to Massachusetts law CPAs have a duty to provide information only to their clients. In this case, the firm's client was Jasmine Company, not Cacciola. The court noted that each year the company's designated representative, Manganella, signed the engagement letter and received the firm's financial statements and tax returns. …

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