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

CA Rohan is the audit partner of Kaveri Foods Ltd. At a family wedding he casually mentions to his brother-in-law, who is a stock trader, that Kaveri's audit has uncovered a large pending customer dispute. He does not intend any gain. Which Code requirement has he primarily failed to meet?

He has failed the duty to be alert to inadvertent disclosure. The Code expressly warns about disclosure in social settings, particularly to close family members or business associates, and confidential client information was revealed at a family event, irrespective of any intent to gain.

  1. ABeing alert to the possibility of inadvertent disclosure, including in a social environment and to a close family memberCorrect
  2. BObtaining the client's authorisation before accepting the engagement
  3. CConsulting the Ethical Standards Board before every social conversation
  4. DEnsuring that advertisements are true to the best of his knowledge

Explanation

The Code requires a chartered accountant to be alert to inadvertent disclosure, including in a social environment and particularly to a close business associate or an immediate or close family member. Rohan's casual remark to a relative breaches this. The advertisement requirement concerns a different principle and is not relevant here.

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