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ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

Anita, an auditor, suspects that a client's director is laundering money. She wishes to warn the director informally so he can explain himself before she files a report with the authorities. Which statement is correct?

Anita would commit tipping off. Disclosing that a suspicion has been or will be reported, where this is likely to prejudice an investigation, is an offence. Reporting afterwards does not cure it, and the director's seniority gives no exception.

  1. AShe may warn him, provided she reports afterwards
  2. BShe commits the offence of tipping off if she discloses the report or suspicion in a way likely to prejudice an investigationCorrect
  3. CShe must warn him, as natural justice requires it
  4. DShe may warn him if he is a senior officer of the client

Explanation

Tipping off is the offence of disclosing a suspicion or report in a way likely to prejudice an investigation. Seniority of the director does not create an exception, and there is no duty to warn. Reporting afterwards does not cure the prior disclosure.

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