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

CA Meera Joshi, a practising chartered accountant, finishes her statutory audit engagement for Kaveri Textiles Ltd. and the client relationship ends. Six months later, a competitor of Kaveri Textiles offers her a consulting assignment and asks her to use the pricing data she learned during the audit. Under the confidentiality requirements of the ICAI Code of Ethics (13th edition), what is the correct position?

She must not use or disclose the pricing data. The Code of Ethics prohibits using or disclosing confidential information after the professional relationship has ended, so the end of the Kaveri Textiles audit does not release her from the duty of confidentiality.

  1. AShe may use the data because the relationship with Kaveri Textiles has ended
  2. BShe may use the data if she changes the figures slightly so the client cannot be identified
  3. CShe may use the data if Kaveri Textiles' pricing later becomes publicly available through a trade journal
  4. DShe must not use or disclose the confidential information even after the relationship has endedCorrect

Explanation

The Code states that a chartered accountant shall not use or disclose confidential information acquired in a professional relationship after that relationship has ended. Ending the engagement therefore does not release the duty. Option 3 is wrong because the duty continues to apply even if the information has become publicly available, whether properly or improperly.

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