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AS > Confidentiality > Flashcards

Confidentiality Flashcards

1
Q

Where is confidentiality important (regulation)?

A
  1. In ethical codes:
    IFAC
    ICAEW
  2. Regulation
    GDPR (EU law)
    Data protection act (Extends law)
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2
Q

Key factor in client/auditor relationship

A

Trust

(Otherwise might not provide all necessary info)

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3
Q

GDPR and DPA confidentiality rules

A
  1. Protection: Anyone who processes personal information must ensure it is protected
  2. Access: Individuals have the right to access both:
    Their personal data
    Information about how it is being processed
  3. Reason: Personal data can only be held if there is a specific lawful reason to do so
    Or if the individual has specifically opted in to allow storage of their data
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4
Q

Key confidentiality risk

A

Accidental disclosure

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5
Q

How to reduce the risk of accidental disclosure

A

Keep client info confidential:
In social environment’s
Within the firm
After the end of a business relationship
When changing employment
When acquiring a new client

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6
Q

The other confidentiality risk to avoid

A

Improper use of info

E.g. insider dealing

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7
Q

Safeguards definition

A

Physical and electronic security measures to avoid disclosure

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8
Q

What should firms ensure all who work on their behalf are trained in and understand in terms of confidentiality

A
  1. It’s importance
  2. Importance of identifying confidentiality and conflict of interest issues
  3. Procedures in place for identifying confidentiality and conflict of interest issues
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9
Q

2 times disclosure is permitted

A
  1. Right to disclose
  2. Duty to disclose
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10
Q

When there is a right to disclose

A
  1. Client PERMISSION obtained
  2. Disclosure is in PUBLIC INTEREST
  3. To defend the firm in a NEGLIGENCE CLAIM
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11
Q

When there is a duty to disclose

A
  1. Ordered by COURT
  2. Required by a REGULATOR
    E.g. FCA, Charity Commission
  3. Suspicions of MONEY LAUNDERING
  4. Suspicions of TERRORISM
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12
Q

Suspicions of money laundering should be reported to

A

National Crime Agency

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13
Q

Suspicions of terrorist activity should be reported to

A

The police

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14
Q

Is it a criminal offence not to report a suspicion of ML?

A

Yes

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15
Q

2 ML roles firms must have

A
  1. Money Laundering nominated officer
  2. MLCP
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16
Q

MLCP

A

money laundering compliance principal

17
Q

Can MLNO and MLCP be the same person?

A

Yes

18
Q

What role must the MLCP have in the firm?

A

On the board
Or member of senior management

19
Q

What is the MLNO responsible for?

A

Firm’s compliance with regulations

Receiving internal reports of ML
suspected or identified

Making disclosures to the NCA

20
Q

Examples of money laundering

A

Keeping customer payments

Non-compliance with a regulation to cut costs

Criminal offenders under the CA
E.g. illegal loan to director

21
Q

Is it improper for an accountant to habe 2 clients whose interest are in conflict?

A

No

(Many firms use industry expertise as a selling point)
(Important that firm can demonstrate their work on one client will not adversely affect another)

22
Q

ICAEW code advice when an accountant has a conflict of interest between 2 clients

A
  1. Notify those clients
  2. Seek their consent to continue to act for both parties

(3. Implement safeguards
To preserve confidentiality)

23
Q

Safeguards to preserve confidentiality in client conflict of interest

A

Separate teams

Information barriers

Confidentiality agreements
Signed by employees and partners

Review of the application of safeguards
By an independent partner

24
Q

Information barriers examples

A

No team overlap
Physical separation of teams
Procedures for maintaining security of records (paper and electronic)

25
Q

What should the firm do if adequate client COI safeguards can’t be implemented?

A

Stop acting for one or both clients

AS (15 decks)

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