AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

Question

In which of the following circumstances would it be permissible for an auditor to disclose confidential information about a client?

A To assist the firm with the audit of another client in the same industry

B To inform shareholders when disclosure is in the public interest

C To protect the interests of the shareholders

D To defend the firm against an official accusation of professional negligence.

Answer

Explanation:

Disclosure of confidential information is permissible when there is a professional duty or right to disclose, not prohibited by law. Disclosure is permissible when it is reasonably necessary to defend an auditor against an official accusation of professional negligence. Disclosing to assist another client (A), inform shareholders (B), or protect shareholder interests (C) does not meet the ethical criteria for disclosure, making D the correct answer.

Tags: Confidentiality, Disclosure, ICAG, Professional Ethics
Level: Level 3

Topic: Rules of Professional Conduct

Uploader: Salamat Hamid