- (a) A third-party auditor shall not participate in unclaimed property examinations in which such participation could be construed as a conflict of interest. An example of a conflict of interest would be a third-party auditor entering into an agreement that contains a provision that is adverse to the interest of the State of California, or a third-party auditor having an existing obligation to a holder that is adverse to the interest of the State of California.
(b) From time to time, a third-party auditor may solicit a holder for preparation of a voluntary report of the holder's unclaimed property. Such an engagement may be one wherein a third-party auditor provides expertise, guidance, and counseling to the holder with respect to the submission of the voluntary report. This is a clear example of a conflict of interest. However, such a solicitation does not constitute a conflict of interest provided that the third-party auditor was:
- (1) Representing the State's interest in the preparation of the voluntary report;
- (2) Did not receive any fees, payments, or payments-in-kind from the holder for its services; and
- (3) Did not obtain any holder information that cannot be disclosed to the State of California because it is deemed confidential.
Note: Authority cited: Section 1571, Code of Civil Procedure. Reference: Section 1571, Code of Civil Procedure.
History
1. New section filed 4-22-2025; operative 7-1-2025 (Register 2025, No. 17).