Confidentiality – Knowsia

AAA – L3 – SA – Q3.3 – Suspected Fraud

First step when suspecting fraud by senior management.

Question

When an auditor suspects that fraud has occurred in a corporate client’s business, and that senior management are involved in the fraud, the auditor should as a first step:

A discuss the matter with the audit committee

B seek legal advice

C ask a professional accountancy body for advice

D report the matter to the police authorities.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor Responsibility, Confidentiality, Fraud, ICAG
Level: Level 3

Topic: Professional responsibility and liability

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

Find Related Questions by Tags, levels, etc.

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

Topic: Rules of Professional Conduct

BMIS – L1 – SA – Q13.1 – Professional ethics in accounting and business

Identifies principles expected of professional accountants in their work.

Question

Professional accountants are expected in their work to apply the principles of integrity, objectivity, professional competence and due care, confidentiality and

A transparency and honesty

B technical standards and openness

C honesty and professional behaviour

D professional behaviour and technical standards

Answer

Find Related Questions by Tags, levels, etc.

Tags: Confidentiality, Ethics, Integrity, Objectivity, Professional behaviour, Professional principles
Level: Level 1

Topic: Professional ethics in accounting and business

BMIS – L1 – Q9 – Professional ethics in accounting and business

Evaluate ethical issues in an accountant’s actions across four scenarios.

Question

Accountant’s behaviour

The fundamental ethical principles for accountants apply to accountants in business as well as accountants in practice.

(a) A fundamental ethical principle in accountancy is that an accountant should be objective, avoiding bias and undue influence. It seems that Kofi has allowed his friendship with the production director to affect his forecasts of costs, and so he is in breach of the principle of objectivity.

(b) The chairman of the company has purchased some expensive evening gowns for his wife at a Lagos fashion show. He tells Kofi to record the cost of the evening gowns as a company expense, as the cost of new protective clothing for workers in the production department. Kofi does what he has been told.

(c) The managing director asks Kofi if he can construct a spreadsheet model for analysing costs. Kofi has never constructed a spreadsheet model, but he does not want the managing director to give the work to a junior accountant in the department. He therefore says that he can construct the spreadsheet. He thinks that if he takes the work home, his sister will be able to help him: he knows that she is good with spreadsheets and will probably help him if asked.

(d) Kofi attends a party at the weekend where he mentions to a friend that he thinks his company is getting into serious financial trouble because it is about to lose a major contract. The friend later mentions his concerns for Kofi’s future to another person at the party, and explains why Kofi might be about to lose his job. The person that the friend speaks to is a senior manager in a rival company to the company that Kofi works for.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Confidentiality, Ethical Principles, False Accounting, Information Disclosure, Integrity, Legal Compliance, Objectivity, Professional Behavior, Professional Competence
Level: Level 1

Topic: Professional ethics in accounting and business

SCS – L3 – Q26 – Professional practice and codes of ethics

Advise Unity Aid on four fundamental principles for its code of ethics.

Question

Unity Aid (UA) is a non-governmental organisation that provides charitable support to disadvantaged families. It is currently involved in a number of community projects to assist in the provision of clean water supply to families in Sierra Leone, Kenya, and Senegal. In its home country, Uganda, it focuses more on assisting clients in accessing state-granted financial support as well as providing counselling and psychological support to less privileged people.

The NGO has grown very rapidly in recent years as demand for its services has increased. In line with this rising demand, it has begun to slowly evolve from an enterprise primarily run by volunteers to an institution employing professional managers from the private sector. These changes are considered essential in supporting the sustainability of the charity.

The board of trustees at the NGO recognize the need to adopt a relevant code of ethics as part of necessary governance support structures. They are, however, concerned about recent criticism of such codes and wish to ensure that any code developed is effective throughout the organization.

Required:

(a) Advise UA on FOUR fundamental principles to be included in its code of ethics.

(b) Explain FOUR benefits of good corporate governance to UA.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Code of Ethics, Confidentiality, Governance, Integrity, NGO, Objectivity, Professional Competence
Level: Level 3

Topic: Professional practice and codes of ethics

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

Question

At its recent Annual General Meeting, management of NTM was highly criticized for two major scandals that occurred in the organization during the year. In one case, newspapers reported that the management of the company connived with officials at the port to undervalue imports in order to pay lower taxes. In the other case, it was reported that the accountant leaked information to his friend who was bidding for a contract in the company. The Board Chairman, who is also the Chief Executive Officer of the company apologized for these incidents but did not disclose that the company had been sued in respect of the first case. He went on to promise the shareholders that the fortunes of the company would change dramatically by the end of the new year as the company was going to start exporting its products to Europe within the next few weeks.

Required:
(a) Identify and explain THREE situations that are in conflict with the International Federation of Accountants (IFAC)’s Code of Ethics.

(b) Explain FOUR disadvantages of the CEO acting also as the Chairman of the Board.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Confidentiality, Conflicts of Interest, Corporate Governance, Disclosure, Ethics, IFAC Code, Integrity, Stakeholder Management
Level: Level 3

Topic: Professional practice and codes of ethics

PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting

Discuss breach of confidentiality by an audit officer sharing audit evidence on a messaging group.

Question

(A) You are a Junior Internal Audit Officer of a regulated entity, and you have conducted an internal audit of some sensitive operations of the entity. The audit covers allowances and bonuses paid or due for payment to the Council Chairperson and other members of the board of governors, including the Managing Director. The transactions and events indicate profligacy and corruption, given the current financial difficulties the entity faces. You took a snapshot of the audit evidence with your phone camera and posted it on your private messaging group to support a claim of corruption you made. This has attracted a lot of traffic to your post, and one of the group members, who is a journalist, decided to spark a bigger debate on the matter in the mainstream media. Your post went viral within 24 hours.

Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (B)

In early December 2022, your District Council received an unplanned visit from top political figures who claimed to be on a political campaign and decided to pay a “courtesy call” on the District Administrator and the Council. The District Administrator quickly asked that a financial package (brown envelope) be prepared for them. The amount was significant but unbudgeted. The visitors left the Council with high commendation from the District Administrator. Thereafter, he asked the Finance Manager to process the necessary documentation to support the brown envelope transactions. The Finance Manager expressed some misgivings about the transactions but advised the accountant to record the brown envelope transaction as “goods and services” under “travel and transport,” which he did without objection.

Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (C)

A Finance Manager of a regulated entity has been at his post for the last two years, and it has become an open secret in the entity that he does not know his job. Since his assumption, the entity has not been able to submit the required quarterly and annual public accounts to the Controller and National Auditor. Auditors have raised many audit observations indicting the entity for poor accounting practices. The financial records are in shambles, the financial statements are in disarray, and the cash management is unfortunate. He secured the job based on his political activism rather than accounting professionalism.

Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (D)

The Finance Manager was touted as the smartest accounting person in Zamara by the Managing Director of the entity. He claims that he always covers for him and delivers him from the corrupt league of public officers. He brags: “This Finance Manager, I have yet to meet his kind of accountant. He understands the language; just discuss it with him, and it is done. Whatever you want. The guy is the smartest of the smart. Even the National Auditor himself can audit him and the report will be clean. I just love this guy because he knows how to cook the books well.”

Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Confidentiality, Ethics, Internal Audit, Professional conduct, Public Sector Accounting
Level: Level 2

Topic: Public expenditure and financial accountability framework

AAA – L3 – Q20 – Professional responsibility and liability

Discuss ethical and professional issues for MM & Co regarding client Pen Co's tax fraud investigation and Scot family's transactions.

Question

You are senior manager in MM & Co, a firm of Chartered Accountants. Recently, you have been assigned specific responsibility for undertaking annual reviews of existing clients. The following situations have arisen in connection with two clients.

(i) MM & Co was appointed auditor of Pen Co last year, and has recently issued an unmodified opinion on the financial statements for the year ended 31 March 2013. To your surprise, the tax authorities have just launched an investigation into the affairs of Pen Co on suspicion of under-declaring revenue. (7 marks)

(ii) Your firm has provided financial advice to the Scot family for many years and this has sometimes involved your firm carrying out transactions on their behalf. The eldest son, Gino, is to take up a position as a senior government official in a foreign country next month. (3 marks)

Required:
Identify and comment on the ethical and other professional issues raised by each of these matters and state what action, if any, MM & Co should now take.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit firm responsibilities, Client Acceptance, Confidentiality, Ethics, Money laundering, Politically exposed persons, Professional conduct
Level: Level 3

Topic: Professional responsibility and liability

AAA – L3 – Q9 – Rules of professional conduct

Explain the importance of ethical principles, demonstrate independence, and outline when confidential client information can be disclosed.

Question

ICAG has adopted IESBA’s ethical guidance, the International Code of Ethics for Professional Accountants. These rules are applicable to all members and students. If these rules are not complied with disciplinary action may result which could lead to reprimand, fine or exclusion.

Required
(a) Explain why you think fundamental principles of ethics are so fundamental to auditing.
(b) Explain how a member can demonstrate that they are truly independent in carrying out the work they perform, and why it is important that they should do so.
(c) Set out the circumstances in which it is permissible to disclose confidential client information.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor Independence, Client information disclosure, Confidentiality, Disciplinary action, Ethics, IESBA Code, Independence, Professional conduct
Level: Level 3

Topic: Rules of Professional Conduct

AAA-L3 – Q6- Rules of Professional Conduct

Evaluate impact of business relationship, auditor parting, and conflict of interest on accepting Vega Investigations as an audit client.

Question

(a) Impact of the three pieces of information

Major service provider to your firm
Acrimonious parting with the previous auditors
The firm already represents the Tarkwa Investigations Group (TIG), a company involved in a hostile take-over of Vega. (b) Other factors to consider in making a decision as to whether to accept Vega as a client (c) Steps to take in accepting nomination

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Risk, Auditor Independence, Client Acceptance, Confidentiality, Conflict of Interest, Fee Dependence, Professional Ethics
Level: Level 3

Topic: Rules of Professional Conduct

Tag (SQ): Confidentiality

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

AAA – L3 – SA – Q3.3 – Suspected Fraud

First step when suspecting fraud by senior management.

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

Permissible disclosure of client confidential information.

BMIS – L1 – SA – Q13.1 – Professional ethics in accounting and business

Identifies principles expected of professional accountants in their work.

BMIS – L1 – Q9 – Professional ethics in accounting and business

Evaluate ethical issues in an accountant’s actions across four scenarios.

SCS – L3 – Q26 – Professional practice and codes of ethics

Advise Unity Aid on four fundamental principles for its code of ethics.

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting

Discuss breach of confidentiality by an audit officer sharing audit evidence on a messaging group.

AAA – L3 – Q20 – Professional responsibility and liability

Discuss ethical and professional issues for MM & Co regarding client Pen Co's tax fraud investigation and Scot family's transactions.

AAA – L3 – Q9 – Rules of professional conduct

Explain the importance of ethical principles, demonstrate independence, and outline when confidential client information can be disclosed.

AAA-L3 – Q6- Rules of Professional Conduct

Evaluate impact of business relationship, auditor parting, and conflict of interest on accepting Vega Investigations as an audit client.

Our offerings

Community

Contact Info

Customer

Get In Touch

Tag (SQ): Confidentiality

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

AAA – L3 – SA – Q3.3 – Suspected Fraud

First step when suspecting fraud by senior management.

You're reporting an error for "AAA – L3 – SA – Q3.3 – Suspected Fraud"

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

Permissible disclosure of client confidential information.

You're reporting an error for "AAA – L3 – SA – Q2.2 – Confidential Information Disclosure"

BMIS – L1 – SA – Q13.1 – Professional ethics in accounting and business

Identifies principles expected of professional accountants in their work.

You're reporting an error for "BMIS – L1 – SA – Q13.1 – Professional ethics in accounting and business"

BMIS – L1 – Q9 – Professional ethics in accounting and business

Evaluate ethical issues in an accountant’s actions across four scenarios.

You're reporting an error for "BMIS – L1 – Q9 – Professional ethics in accounting and business"

SCS – L3 – Q26 – Professional practice and codes of ethics

Advise Unity Aid on four fundamental principles for its code of ethics.

You're reporting an error for "SCS – L3 – Q26 – Professional practice and codes of ethics"

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

You're reporting an error for "SCS – L3 – Q17 – Professional practice and codes of ethics"

PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting

Discuss breach of confidentiality by an audit officer sharing audit evidence on a messaging group.

You're reporting an error for "PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting"

AAA – L3 – Q20 – Professional responsibility and liability

Discuss ethical and professional issues for MM & Co regarding client Pen Co's tax fraud investigation and Scot family's transactions.

You're reporting an error for "AAA – L3 – Q20 – Professional responsibility and liability"

AAA – L3 – Q9 – Rules of professional conduct

Explain the importance of ethical principles, demonstrate independence, and outline when confidential client information can be disclosed.

You're reporting an error for "AAA – L3 – Q9 – Rules of professional conduct"

AAA-L3 – Q6- Rules of Professional Conduct

Evaluate impact of business relationship, auditor parting, and conflict of interest on accepting Vega Investigations as an audit client.

You're reporting an error for "AAA-L3 – Q6- Rules of Professional Conduct"

Our offerings

Community

Contact Info

Customer

Get In Touch

admin

Pick a Form