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CA Final · Financial Reporting · Professional and Ethical Duty of a Chartered Accountant

CA Anil Bhatt is asked to respond to an inquiry from the Institute on a complaint about an audit he performed for Sunrise Agro Ltd. The client has refused to consent to any disclosure. Anil wants to know whether he may disclose confidential client information to answer the inquiry. Under the Code of Ethics (13th edition), which is correct?

Anil may disclose the information. The Code recognises a professional duty or right to respond to an inquiry or investigation by the Institute or another regulator, where not prohibited by law or regulation, so the client's refusal of consent does not block this disclosure.

  1. AHe may disclose, since there is a professional duty or right to respond to an inquiry or investigation by the Institute, when not prohibited by law or regulationCorrect
  2. BHe may not disclose without the client's consent in any circumstance
  3. CHe may disclose only if the client's competitor agrees
  4. DHe may disclose freely to the press as well, as the inquiry is public

Explanation

The Code lists, as a professional duty or right to disclose, responding to an inquiry or investigation by the Institute or another regulator, provided it is not prohibited by law or regulation. Client consent is one exception but not the only one. The disclosure is limited to what the inquiry needs; it does not extend to the press.

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