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

CA Meera Joshi, a practising chartered accountant, completed a statutory audit engagement for Kaveri Textiles Ltd. and the relationship has ended. Six months later, a competitor of Kaveri Textiles offers her a fee to use pricing information she learned during the audit, adding that the same information is now reported in a trade magazine. What is the position under the ICAI Code of Ethics (13th edition)?

She must not use or disclose the information. Under the ICAI Code of Ethics, confidentiality survives the end of the relationship, and the duty still applies even when the information has become publicly available, whether properly or improperly. Only the client's authorisation or a legal or professional duty or right would permit use.

  1. AShe may use it, because the information has become publicly available through the magazine
  2. BShe may use it, because the engagement with Kaveri Textiles has ended
  3. CShe may use it if the competitor agrees to keep it confidential
  4. DShe must not use or disclose it, as the duty of confidentiality continues after the relationship ends and even if the information has become publicly availableCorrect

Explanation

The Code says a chartered accountant shall not use or disclose confidential information after the professional relationship has ended. It also bars use or disclosure of such information even where it has become publicly available, properly or improperly. The first two options ignore these two rules, and the third is wrong because the competitor's promise does not amount to authorisation from the client.

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