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Letter to the Editor: Professor advocates limited priviledge for accountants

|Written By Paul Paton

I appreciate the important coverage in the May 16 edition of Law Times given to the report released by the Canadian Bar Association on solicitor-client privilege (see “Alarm sounded on solicitor-client privilege”).

The story unfortunately incompletely states my position on the extension of privilege to accountants.

I’ve specifically advocated for only a limited form of privilege for accountants and, in particular, for audit working papers.

The Canada Revenue Agency practice of making broad demands for this information from accountants about their opinions and clients’ subjective intentions has put Canada out of step with approaches taken by the United States, Britain, and New Zealand, all of which have had legislation recognizing a limited form of privilege for accountants.

In addition, those countries and Australia have limited the ability of tax authorities to seek disclosure from auditors only in well-defined and special circumstances.

Unlike their Canadian counterparts, authorities in those countries have recognized the need to craft a balance between the corporate governance priority of preserving the ability of auditors to help ensure open and transparent financial reporting and pressures on them from tax authorities wanting a road map to client intentions.

I set this argument out in detail in a peer-reviewed article in the Dalhousie Law Journal in 2005. Professor Adam Dodek’s report for the CBA refers to it in setting the stage for the necessary and important debates to follow.

I’d invite Law Times readers to delve more fully into the position than the article’s summary provides.

Paul Paton, professor of law,
University of the Pacific McGeorge
School of Law, Sacramento, Calif.
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