Not Your Typical IT Guys

Here is the release from the FTC… doesn’t say they are working on any exemption yet…just giving companies more time to prepare.  Hopefully everyone doesn’t go to sleep between now and June…

CPA’s are almost exempt…well some of them anyway.  On October 20th the House passed House Bill 3763 which will exempt accounting firms with less than 20 employees from being subject to the FTC’s Red Flag Rules.  There is also a provision in the bill to exempt healthcare, legal practices and any other business that meets certain criteria may be exempted after filing an application.  Its not clear from the bill is there are any employee size criteria for the application process.

The Senate now has this bill as well as a companion bill that they have already started debate on.

…could this potentially effect hiring decisions??

We are now just outside of 2 weeks away from the official enforcement date of the FTC Red Flag Rules. The major question of the day is, Does this effect CPA firms? And the answer is…wait for it… more than likely YES. Now that being said the AICPA has been working hard to get an exemption for CPA’s however, to date the FTC has offered no exemptions.

So question number two is, Why are CPA firms impacted? Per the regulations there are 2 groups that are impacted by the Red Flag Rules, Financial Institutions and Creditors. CPA’s are not Financial Institutions however most of them are Creditors.  The definition of a Creditor per the Red Flag Rule Regulation is, “a businesses or organizations that regularly provide goods or services first and allow customers to pay later.” As a rule this is most CPA firms, and likely many of your clients….

There are a number of resources available to help you and your firm address the Red Flag Rules:

FTC’s How to Guide

FTC’s Frequently Asked Questions

AICPA’s Information Technology Center

FTC’s Do-It Yourself Red Flag Rule Template

Please comment with any other good resources you know of to help everyone adopt these regulations.

Check back here as Nov 1 closes in and we will keep you posted on any updates that come up in the next couple weeks.