CPA Licensing, Confidentiality, Privilege & Liability | CPA REG Foundations

REG Area I also tests the legal and professional duties of CPAs. In this CPA REG Foundations lesson, you’ll learn how to analyze questions involving CPA licensing, disciplinary authority, common-law duties, professional liability, confidentiality, privilege, and privacy obligations. The core approach is to ask: 1. Who regulates the CPA? 2. What professional or legal duty applies? 3. Who is the duty owed to? 4. Was there misconduct or a breach? 5. Is the information confidential or privileged? 6. What consequence follows? The lesson explains the distinction between state CPA licensing and IRS practice rights, the elements of a negligence claim, liability to third parties, confidentiality exceptions, and the limited federal tax-practitioner privilege under IRC Section 7525. You’ll also see how these rules apply in exam-style scenarios involving unauthorized disclosure and third-party reliance. CHAPTERS 00:00 CPA legal and professional duties 00:19 Legal-duty exam framework 00:47 Client vs. third-party issues 01:16 CPA licensing and disciplinary systems 01:46 IRS discipline vs. state licensing 02:14 Common-law duties to clients 02:41 Negligence framework 03:11 Reliance, causation and damages 03:41 Liability to third parties 04:11 Fraud and gross negligence 04:41 Confidentiality 05:08 Confidential information vs. public information 05:18 Confidentiality vs. privilege 05:37 Federal accountant-client privilege 06:06 IRC Section 7525 privilege 06:28 Criminal tax matters 06:50 Privacy obligations 07:17 Unauthorized disclosure example 07:55 Third-party negligence example 08:36 Common REG Exam traps 09:07 Privilege and liability traps 09:30 Final CPA legal-duty framework Key concepts covered: • CPA licensing • State boards of accountancy • IRS practice rights • Circular 230 discipline • CPA negligence • Due care • Professional competence • Engagement letters • Breach of duty • Reliance • Proximate causation • Actual damages • Third-party liability • Foreseen users • Ordinary negligence • Gross negligence • Fraud • Confidentiality • Client consent • Court subpoenas • Peer review • State board investigations • Privileged communications • IRC Section 7525 • Tax practitioner privilege • Civil tax matters • Criminal tax matters • Privacy obligations Use this video as part of the CPA REG Foundations — Area I: Ethics & Federal Tax Procedures series. After watching, reinforce these concepts with related multiple-choice questions and task-based simulations in your CPA review course. Continue with the CPA REG Foundations — Area I playlist:    • CPA REG Foundations — Area I: Ethics & Fed...   Start with the REG CPA Exam — Start Here playlist:    • REG CPA Exam — Start Here   CPA Explained AI is an independent educational platform and is not affiliated with, endorsed by, or sponsored by the AICPA, NASBA, or any CPA review course provider. #CPAExam #CPAREG #CPALiability #TaxEthics