Chapter 16: Confidentiality

Question 1

Which risk is greater in terms of breaching confidentiality?

Answer 1

Accidental disclosure rather than deliberate disclosure

Question 2

Take the example of some accidental disclosure

Answer 2

eg: talking about the client’s affairs in the wrong place, leaving the client’s information exposed

Question 3

Name some examples of matters which are personal data breaches

Answer 3

eg: unauthorised access to file storage, leave documents in a public area, emailing wrong recipient, loss of personal data…

Question 4

What are some security procedures to prevent accidental disclosure of information?

Answer 4

eg: do not discuss client matters outside of the accountancy firm, do not leave audit files unattended, do not work on electronic working papers on systems that do not have protection

Question 5

What are security procedures to prevent accidental disclosure of information?

Answer 5

eg: do not discuss client matters with any party outside of the accountancy firm/ in a public place, do not leave audit files unattended, do not work on electronic working papers on systems that do not have the protection

Question 6

In what cases are the auditors required to disclose confidential information?

Answer 6

1. when disclosure is permitted by law and is authorized by the clients/ employers
2. when disclosure is required by the law, eg: when clients are involved in terrorist activities, suspected money laundering

Question 7

The Code of Ethics states that a professional accountant can disclose confidential information to third parties in what case?

Answer 7

If the disclosure can be justified in the public interest

Question 8

What are some information barriers (Chinese wall) strategies?

Answer 8

1. ensure that there is no overlap between different teams
2. physical separation of teams
3. careful procedures for information have to be gone beyond a barrier

Question 9

Of the following reasons, which are voluntary/ obligatory disclosures?
1. Disclosure needed to protect the auditor’s own interests
2. Information is required for the auditor of another client
3. Auditor knows the client has committed the terrorist offence
4. Auditors considers there to be non-compliance with laws and regulations
5. Auditors suspect clients has committed fraud

Answer 9

1. voluntary
2. N/A
3. obligatory
4. obligatory in some cases (must take legal advice about what their duties are)
5. N/A

Question 10

What are some occasions when it is appropriate to make disclosures of client information?

Answer 10

1. with client’s permission
2. when required by law, eg: when money laundering is suspected
3. in accordance with auditing standards
4. to protect a member’s interests
5. in the public interest
6. when compelled by the process of law

Question 11

What should auditors should to when making disclosures to ensure that they are made appropriately?

Answer 11

should seek legal advice