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

CA Rohan Iyer is a partner in a mid-sized firm. A trainee mentions at a family dinner, in front of her brother, details of the pending acquisition plans of a client of the firm. Rohan learns of this later. Which action best reflects his responsibility under the ICAI Code of Ethics (13th edition)?

He should take reasonable steps to make sure personnel under his control, such as the trainee, comply with confidentiality, and remain alert to inadvertent disclosure in social settings and to family members. The Code of Ethics places this duty on the accountant, so ignoring the incident or disclosing further would be wrong.

  1. ANo action is needed because the trainee is not a chartered accountant
  2. BTreat it as acceptable because the brother is only a family member
  3. CTake reasonable steps to ensure that personnel under his control comply with the duty of confidentiality, and be alert to inadvertent disclosure including in a social environment or to family membersCorrect
  4. DDisclose the matter to the client's competitors to limit damage

Explanation

The Code requires an accountant to be alert to inadvertent disclosure, including in a social environment and to immediate or close family members. It also requires reasonable steps to ensure that personnel under the accountant's control comply with confidentiality. The first two options contradict these requirements, and the last would itself breach confidentiality.

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