ACCA Strategic Professional · Advanced Audit and Assurance (International) · Laws and regulations
Under the IESBA Code, an auditor identifies suspected NOCLAR at an audit client, and law in the jurisdiction prohibits tipping-off in connection with money laundering but is silent on other disclosures. The auditor has concluded the matter is of significant public interest and management has not remedied it. Which statement is correct about the auditor's disclosure?
The Code allows disclosure to an appropriate authority without breaching confidentiality when it is in the public interest, but the auditor must obey laws prohibiting disclosure, such as tipping-off, and should take legal advice. Client consent is not needed and press disclosure is not appropriate.
- AConfidentiality always prevents any disclosure to an authority
- BDisclosure to an appropriate authority is permitted by the Code in these circumstances, but the auditor must comply with any laws that prohibit disclosure, such as tipping-off provisions, and should consider legal adviceCorrect
- CThe auditor must disclose to the press if the authority does not respond
- DThe auditor is required to disclose only after obtaining client consent
Explanation
The Code states that disclosure to an appropriate authority is not a breach of the duty of confidentiality, but the auditor must still comply with law that prohibits or restricts it, such as tipping-off rules, and should consider legal advice. Confidentiality is not absolute here, client consent is not required, and disclosure to the press is not contemplated.
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