Ethics Flashcards
What are the rules about disclosing information?
You should not disclose information acquired from a client.
Use information acquired from a client for your own advantage.
The duty continues even after the end of the relationship.
You can disclose the information IF:
Disclosure is permitted by law (authorised by your client)
Disclosure is required by law ( anti money laundering)
You may use experience and expertise gained from advising clients to advise other clients.
What are the rules regarding conflicts of interest?
You should take reasonable steps to identify circumstances where a conflict of interest could arise.
e.g.
Acting for both spouses/civil partners in a settlement regarding the breakdown of their relationship.
Acting for both shareholders and directors in a personal capacity.
Acting for both parties on the sale of a business.
What are examples of safeguards which can be put in place to avoid conflicts of interest?
Notifying the relevant parties that there may be conflicts of interest.
Obtaining consent from both parties to act for them.
If consent is refused by either party then you must not continue to act for them.
The use of separate engagement teams.
Procedures to prevent access from separate teams.
Clear guidelines for members of the engagement team on issues of security and confidentiality.
Use of confidentiality agreements.
Regular review of senior individual not associated with either party.
How should you deal with prospective clients?
Before accepting new client consider if it would pose any threats to compliance with the fundamental principles.
Threats to integrity could be a client being involved with tax evasion.
Threats to professional competence and due care could be the engagement team not having the skills to properly carry out the engagement.
You should decline the engagement if you suspect any threats to compliance.
How should you deal with contacting existing accountants?
You should contact the existing accountants to find out if there were any previous issues with the client (get client permission first).
Which responsibilities do you have with regards to tax evasion?
If a client fails to provide any information you ask for then you need to consider whether you can act for the client.
You should advise client to make full disclosure to HMRC or to authorise you do so.
If the client refuses then you can non longer act for them.
