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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Code of Ethics for Professional Accountants

During the audit of Meridian plc, the audit senior learns from the client's records that Meridian intends to bid for a competitor of another audit client, Sable Ltd, which is audited by the same firm but by a different team. Sable's finance director asks the senior whether any large bids are being planned in the sector. Which response best complies with the Code's confidentiality principle?

The senior must not disclose anything obtained from the Meridian engagement unless Meridian gives proper and specific authority or there is a legal or professional right or duty to disclose. Being a client of the same firm gives Sable no entitlement, and a promise of secrecy from Sable does not cure the breach.

  1. AShare general sector rumours only if the Meridian bid is not named
  2. BDecline to disclose any information obtained from the Meridian engagement without proper and specific authority or a legal or professional right or dutyCorrect
  3. CDisclose the bid because Sable is also a client of the firm and the firm owes it a duty of openness
  4. DDisclose the bid only if Sable agrees to keep it confidential

Explanation

Information acquired from a client relationship must not be disclosed or used for the advantage of others without proper and specific authority or a legal or professional right or duty. Sable's agreement to keep it quiet is irrelevant because Meridian has not authorised disclosure. Hinting at it through rumours is still indirect disclosure.

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