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

CA Arvind Rao is sued by a former client, Sundaram Agro Ltd, for negligence in a tax matter. To defend himself he wants to produce certain client working papers before the court. Under the ICAI Code of Ethics (13th edition), when is such disclosure of confidential information permitted?

Disclosure is permitted. The Code recognises a professional duty or right to disclose confidential information to protect the accountant's professional interests in legal proceedings, provided law or regulation does not prohibit it. Client consent is one exception but not the only one.

  1. AOnly if Sundaram Agro Ltd gives written consent in every case
  2. BNever, because confidentiality is absolute after the relationship ends
  3. COnly after informing the press about the dispute
  4. DYes, where there is a professional duty or right to disclose to protect his professional interests in legal proceedings, and law or regulation does not prohibit itCorrect

Explanation

The Code lists, as a professional duty or right to disclose where not prohibited by law, the need to protect the professional interests of a chartered accountant in legal proceedings. Client consent is a separate exception, not the only one. Hence the claim that consent is always needed is wrong.

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