Oregon accountants face new disclosure and fee regulations under SB 797

On February 13, 2025, the Oregon State Legislature introduced Senate Bill 797, a significant piece of legislation aimed at reforming the practices of certified public accountants (CPAs) and public accountants in the state. The bill seeks to enhance transparency and ethical standards within the accounting profession, addressing concerns about conflicts of interest and the integrity of financial reporting.

One of the key provisions of SB 797 prohibits accountants from preparing tax returns or claims for tax refunds for a contingent fee. This measure is designed to eliminate potential conflicts of interest that could arise when accountants have a financial stake in the outcomes of their clients' tax filings. Additionally, the bill mandates that any accountant expecting or accepting a fee for recommending products or services must disclose this information to clients in a clear and conspicuous manner, ensuring that clients are fully informed about any potential biases.

The legislation also includes amendments to existing laws regarding the ownership of client records. Under SB 797, all documents created by accountants during the course of providing services remain the property of the accountant unless there is an explicit agreement stating otherwise. This provision aims to clarify the rights of accountants regarding their work products while also protecting client confidentiality.

Debate surrounding SB 797 has highlighted concerns from various stakeholders. Supporters argue that the bill is a necessary step toward increasing accountability and trust in the accounting profession, particularly in light of recent scandals that have raised questions about ethical practices. Critics, however, have expressed concerns that the new regulations may impose undue burdens on accountants, particularly smaller firms that may struggle to comply with the increased disclosure requirements.

The implications of SB 797 extend beyond the accounting profession. By fostering greater transparency and ethical conduct, the bill aims to enhance public confidence in financial reporting, which is crucial for the overall health of Oregon's economy. Experts suggest that improved trust in financial statements could lead to increased investment and economic growth in the state.

As the legislative process unfolds, the future of SB 797 remains uncertain. Lawmakers will need to balance the need for stricter regulations with the potential impact on the accounting industry. The bill's progress will be closely monitored by both supporters and opponents, as its outcomes could set important precedents for accounting practices in Oregon and potentially influence similar legislative efforts in other states.