Question
Patel, a member, is a sole practitioner CPA who provides bookkeeping, financial statement, and tax preparation services to his clients. To assist Patel with his
Patel, a member, is a sole practitioner CPA who provides bookkeeping, financial statement, and tax preparation services to his clients. To assist Patel with his workload, he has hired a third-party service provider to enter client bookkeeping information (coded checks, deposits) and to do bank reconciliations for some of his clients. In addition, Patel uses a different third-party service provider to provide cloud based record storage, software application hosting, and e-file tax transmittal services. Which of the following statements is true regarding the disclosure(s), if any, that Patel is required to provide to his clients regarding the use of the aforementioned third-party service providers?
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a) Patel is not required to disclose the use of either third-party service provider.
b) Regarding the third-party service provider performing bookkeeping services, Patel should inform the client(s) involved, prior to disclosing confidential client information and preferably in writing, that he may use a third-party service provider.
c) Regarding the third-party service provider hosting cloud based services, Patel should inform the client(s) involved, prior to disclosing confidential client information and preferably in writing, that he may use a third-party service provider.
d) Patel is required to disclose the use of both third-party service providers.
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