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

CA Meera Joshi, a practising chartered accountant, has finished a statutory audit engagement for Vaidya Textiles Ltd and the relationship has ended. Six months later a competitor of Vaidya Textiles offers her a consulting assignment and asks her to use the pricing data she saw during the audit. The data has since been published in a trade magazine. Under 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 says the duty of confidentiality survives the end of the professional relationship and still applies even when the information has become publicly available, whether properly or improperly. Neither the audit ending nor the magazine publication releases her from it.

  1. AShe may use the data because the audit relationship has ended
  2. BShe may use the data because it has become publicly available
  3. CShe may use the data if she charges the competitor a higher fee
  4. DShe must not use or disclose the data, as the duty of confidentiality continues after the relationship ends and even where the information has become publicCorrect

Explanation

The Code states that a chartered accountant shall not use or disclose confidential information after the professional relationship has ended. It also bars use or disclosure of information subject to the duty of confidentiality even if it has become publicly available, whether properly or improperly. Hence both the end of the engagement and the magazine publication are irrelevant, and the fee has no bearing.

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