Client-CPA-Attorney Privilege and Information Technology Risk

Alan Reinstein, DBA, CPA, and Jack Seward

In the past few years, the public has seen more than 150 million records compromised: data breaches that included AICPA membership lists, losses of crucial university databases, and Big Four firms losing laptops containing confidential information (see www.privacyrights.org and Tom Zeller, Jr., “An Ominous Milestone: 100 Million Data Leaks,” New York Times, December 18, 2006). The Department of Veterans Affairs reported the theft of 26.5 million Social Security numbers in May 2006 from an employee whose home was burglarized. Perhaps the best-known incident was the 2005-2006 hacking of more than 45 million files of TJX Companies, Inc. (Joseph Pereira, “Breaking the Code: How Credit Card Data Went Out Wireless Door,” Wall Street Journal, May 4, 2007). None of the victims used readily available encryption technologies to protect their electronic data.