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

Harbour & Lane, an audit firm, is asked by Delta Plc, a non-audit client, for a reference on a former employee who has applied to work at Delta. The former employee has not given consent. Under the IESBA Code, what should the firm do about disclosing confidential information about that individual?

The firm should not disclose the information. The IESBA Code requires confidentiality to be maintained unless there is proper and specific authority, such as consent, or a legal or professional right or duty to disclose. The requester's legitimate interest alone does not provide that authority.

  1. ADisclose it, because the request comes from a prospective employer with a legitimate interest
  2. BRefrain from disclosing confidential information unless there is a legal or professional right or duty, or proper authority, to do soCorrect
  3. CDisclose it, provided Delta signs a confidentiality undertaking
  4. DDisclose only information that is favourable to the individual

Explanation

The Code requires professional accountants to respect confidentiality and not disclose information acquired through professional or business relationships without proper and specific authority, unless there is a legal or professional right or duty to disclose. A legitimate interest on the part of the requester or an undertaking does not create that authority. Selective disclosure is still disclosure.

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