Confidentiality

Question 1

When does an audit firm have a right to disclose client information?

Answer 1

1. Client permission obtained
2. Where disclosure is in the public interest
3. To defend the firm in a negligence claim

Question 2

When does an audit firm have a duty to disclose client information?

Answer 2

1. If ordered to disclose by a court
2. If required by a regulator
3. Suspicions of money laundering
4. Suspicions of terrorist activities

Question 3

Who should an audit firm contact if they suspect money laundering?

Answer 3

The National Crime Agency

Question 4

Who should an audit firm contact if they suspect terrorist activities?

Answer 4

The police

Question 5

What constitutes tipping off according to the Money Laundering Regulations 2007

Answer 5

If the firm were to advise the client that they have reported a suspicion of money laundering

Question 6

Is reporting money laundering seen as a breach of confidence?

Answer 6

No

Question 7

What happens if an auditor does not report a suspicion of money laundering?

Answer 7

They have committed a criminal offence under the Money laundering Regulations 2007

Question 8

Is it ok for an accountant to have two clients whose interests are in conflict?

Answer 8

Yes

Question 9

What is the ICAEW Code of Ethics advice to accountants in situation where there is a conflict of interest between clients?

Answer 9

1. Notify the relevant clients

2. Seek their consent to continue to act for both parties

Question 10

What safeguards should be implemented if an audit firm acts for two clients whose interests are in conflict?

Answer 10

1. Separate teams
2. No overlap between different teams
3. Physical separation of teams
4. Procedures for maintaining security of paper and electronic records
5. Confidentiality agreements signed by employees and partners
6. Review of the application of safeguards by an independent partner