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ACCA Strategic Professional · Strategic Business Reporting (International) · Professional and ethical behaviour in corporate reporting

Priya is the chief accountant of Corvus Co. During a bank meeting she learns of a rival's confidential takeover plans from a friend at the bank, and her own CEO later asks her to use this to time a share purchase for the CEO's benefit. In relation to the fundamental principles, which statement is correct?

Using the information would breach confidentiality. The ACCA Code forbids accountants from using confidential information gained through professional relationships for the personal advantage of themselves or third parties. This covers information obtained from third parties as well, and later disclosing the share purchase does not remove the breach.

  1. AUsing the information would breach confidentiality, as it requires not using confidential information for personal advantage of the accountant or third partiesCorrect
  2. BConfidentiality applies only to a client's information and not to information from third parties
  3. CConfidentiality ceases to apply once the information is known to a senior officer of the company
  4. DUsing the information is acceptable provided the share purchase is disclosed in the annual report

Explanation

The confidentiality principle prohibits using confidential information acquired through professional relationships for the personal advantage of the accountant or third parties. It covers information from third parties too. Later disclosure of the purchase does not cure the breach.

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