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

CA Rohan Kulkarni is a partner in a mid-sized firm. A client, Sahyadri Foods Pvt Ltd, has authorised him in writing to share its financial information with a prospective lender. Which statement is consistent with the ICAI Code of Ethics (13th edition) on confidentiality?

Disclosure is permitted because the client has authorised it, as long as law or regulation does not prohibit it. The Code lists client authorisation as an exception to the confidentiality duty. A court order, the lender being a client, or the information being public is not required.

  1. ADisclosure is permitted because it is authorised by the client, provided it is not prohibited by law or regulationCorrect
  2. BDisclosure is never permitted without a court order
  3. CDisclosure is permitted only if the lender is also a client of the firm
  4. DDisclosure is permitted only to the extent the information is already public

Explanation

The Code allows a chartered accountant to disclose or use confidential information where this is authorised by the client or a person with authority to permit disclosure, and this is not prohibited by law or regulation. A court order is only one of several circumstances. The lender being a client or the information being public is not a condition for disclosure.

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