Confidentiality – Page 3

AAA – Nov 2013 – L3 – SB – Q1 – Ethical Issues in Auditing

Evaluate whether to comply with a former executive’s request for audit services while addressing confidentiality in auditor-client relationships.

Question

Your firm acts as the auditors and advisers to Naija Seven Limited, and to its four directors. The company is owned 50% by Praise Caro, 25% by his wife Madame, and 10% by James Patrick. Braima is the Chief Executive, and Julius is the Finance Director. Julius’ sister, Mabel Mama, recently resigned from the executive board following a disagreement with Praise. Mabel Mama formed her own company, Nigeri Heaven, in competition with Naija Seven.

Currently, Mabel is negotiating with her former co-executives on the profit-related remuneration due to her and the sale of her 15% holding of shares in Naija Seven to one or all of them.

Mabel Mama has contacted you to find out Praise Caro’s current remuneration package since he refused to disclose it to her. She has also requested that your firm should continue to act as her personal adviser, financial adviser, and auditor to Nigeri Heaven.

Answer

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Tags: auditor-client relationship, Confidentiality, Conflict of Interest, Ethical considerations, Independence, Professional Behavior
Level: Level 3

Topic: Ethical Issues in Auditing
Series: NOV 2013

AAA – Nov 2016 – L3 – Q2 – Ethical Issues in Auditing

Discuss ethical and legal obligations of auditors regarding independence, confidentiality, money laundering, and client competition safeguards.

Question

As an Audit Manager in a big audit firm in Nigeria, you were opportuned to attend a conference on Professional Ethics and Anti-Money Laundering in New York. On your return, one of the audit seniors went through the presentations and asked questions on some of the statements she noted in the presentations.

You are required to explain the following statements to her:

a. A good Auditor is an independent auditor. (5 Marks)
b. The Accountant’s normal professional duty of confidentiality to clients is not an adequate defence where money laundering is involved. (5 Marks)
c. Specific obligations for detecting and reporting suspicions of money laundering are placed on professional firms. (5 Marks)
d. A firm might act for two clients that are in direct competition with each other where there are acceptable safeguards. (5 Marks)

Answer

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Tags: Auditor Independence, Confidentiality, Conflict of Interest, Money Laundering Detection
Level: Level 3

Topic: Ethical Issues in Auditing

AAA – Nov 2012 – L3 – SA – Q1 – Regulatory Framework and Professional Standards

Understanding conditions under which an auditor may disclose client’s confidential information.

Question

An auditor can disclose the client’s confidential information for the following reasons EXCEPT:
A. Auditor suspects that the client has committed treason
B. When there is a public duty to disclose
C. Disclosure is needed to protect the auditor’s interest
D. When the client has committed an act of felony
E. When information is formally requested by another client

Answer

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Tags: Auditor’s Disclosure, Confidentiality, Ethics, Regulatory Framework
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2011 – L3 – SA – Q5 – Ethical Issues in Auditing

Identifies exceptions where auditors may not disclose a client's confidential information.

Question

Auditors can disclose the client’s confidential information for the following reasons EXCEPT:

A. Auditors know client has committed terrorist offence
B. Information is required by the auditor for another client
C. Auditors suspect client has committed treason
D. There is public duty to disclose
E. Disclosure is needed to protect auditor’s own interest

Answer

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Tags: Auditor Disclosure, Client Information, Confidentiality, Ethics, Legal Requirements
Level: Level 3

Topic: Ethical Issues in Auditing
Series: NOV 2011

AA – May 2016 – L2 – Q3 – Ethical Issues in Auditing

Examination of ethical issues in client engagement, fundamental ethical principles, and lawful disclosure obligations for auditors.

Question

You have recently been appointed the auditors of Spicer Plc, a company whose shares are traded on a stock exchange. The directors of Spicer Plc have recommended that you perform the following services:

The statutory audit of the annual accounts
Taxation services
Consultancy services in respect of the implementation of a new information technology system

Your firm has not acted for Spicer Plc before but does act as auditors to one of its major competitors.

Required:
a. Identify and explain the professional and ethical issues that should have been identified by your firm in relation to the provision of the services outlined above to Spicer Plc and describe the safeguards that should be in place in order to address these issues. (11 marks)

b. What are the five fundamental principles of ethics? Briefly explain their meaning. (5 marks)

c. A client’s affairs should not be disclosed to third parties. However, where a client has been guilty of an unlawful act, to whom should the auditor disclose this information, and in what order? (4 marks)

Answer

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Tags: Client Engagement, Confidentiality, Disclosure, Ethics, Professional Standards
Level: Level 2

Topic: Ethical Issues in Auditing
Series: MAY 2016

CSME – May 2017 – L2 – SB – Q2 – Corporate Culture and Strategy

Discuss the cultural web and the ethical principles for maintaining client confidentiality.

Question

Johnson and Scholes suggested that there is a cultural web within an organization.

Required:

a. Discuss the idea of the cultural web and its interrelated elements in a way that would assist a new employee to understand this concept in a business organization. (15 Marks)

b. As a professional accountant, explain any TWO ethical principles or requirements you would consider in deciding whether or not to keep a promise to maintain confidentiality with regards to information acquired from a client in the ordinary course of business. (5 Marks)

Answer

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Tags: Confidentiality, Cultural Web, Ethics, Johnson and Scholes, Organizational Culture
Level: Level 2

Topic: Corporate Culture and Strategy
Series: MAY 2017

AA – May 2023 – L2 – SA – Q3 – Planning an Audit

Key preliminary audit activities, confidentiality characteristics, and stages of analytical review.

Question

The following issues emanated from the pre-audit meeting of FIFO Limited:

The operating environment has been affected by the COVID-19 pandemic. Management has responded with policy initiatives to stem negative impacts, resulting in financial contractions in Q2 2020 that affected half-year results and necessitated budget revisions. Effects included GDP shrinkage, lower investment yields, foreign exchange rate growth, and inflation.
Increased accounts receivable due to customers’ repayment issues.
Focus on liquidity to support daily operations.
Volatile profit before tax, requiring alternative materiality benchmarks such as gross profit or total revenue.
Firm’s software calculates materiality based on selected benchmarks, with auditor judgment essential in assessing materiality.
Engagement team declaration of independence and confidentiality of client information.
Completion of preliminary engagement activities on schedule for timely review.
Use of preliminary analytical review as a risk assessment tool to identify unusual transactions, events, and trends that may indicate audit-relevant matters, including fraud risks. This should be handled with care.

Required:

a. State the preliminary activities to be undertaken before the commencement of the audit. (6 Marks)

b. State the characteristics of confidentiality in auditing. (7 Marks)

c. Explain briefly the purposes of analytical review. (4 Marks)

d. State at what stage of the audit an analytical review should be performed. (3 Marks)

Answer

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Tags: Analytical procedures, Audit Planning, Confidentiality, Risk Assessment
Level: Level 2

Topic: Planning an Audit
Series: MAY 2023

AA – Nov 2015 – L2 – Q5a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

Discussing the fundamental principle of duty of confidentiality in audit and assurance engagements.

Question

Briefly discuss the fundamental principle of Duty of Confidentiality.

Answer

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Tags: Auditors' responsibilities, Confidentiality, Professional Ethics
Level: Level 2

Topic: Professional Ethics and Code of Conduct for Auditors
Series: NOV 2015

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying circumstances under which a banker may disclose customer information.

Question

A banker may disclose information of its customer’s account in the following circumstances EXCEPT where:
A. The banker is lawfully compelled to do so
B. The customer’s creditor demands it
C. It is in the banker’s interest to disclose it
D. The customer makes express or implied request for it
E. The banker is required to disclose by law

Answer

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Tags: Banking, Confidentiality, Disclosure
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

CR – May 2020 – Q3b(i) – Ethical Issues in Contract Bidding

This question requires a discussion on the ethical issues related to conflict of interest, confidentiality, and professional behavior in a contract bidding scenario.

Question

You have just obtained your full membership with the Institute of Chartered Accountants (Ghana). Following this successful achievement, you have been appointed as the Head of Finance at Asasiyemedeh Company Limited, a Ghanaian company, which provides catering services. Your former employer, Akwaba Limited, is a large public sector organization operating in Accra, where, as the Financial Accountant, you had the opportunity to work on areas relating to financial accounting, procurement, contracts, and bids. One of Asasiyemedeh Company Limited’s major contracts is with Akwaba Limited, your former employer. The contract is now due for renewal, and Asasiyemedeh Company Limited is preparing a competitive bid for this contract.

You have been tasked to lead the team responsible for bidding for this contract, but you are concerned as a professional that you might breach confidentiality if you accept this role. You also suspect that your knowledge and experience of Akwaba Limited were seen as good reasons for appointing you to the position of Head of Finance at Asasiyemedeh Company Limited. You do not in any way want to let your new employer down as you are aware that the loss of such a major contract would have a significant effect on the financial performance of Asasiyemedeh Company Limited, and its performance-related bonus scheme for management members.

Required:
Discuss the ethical issues raised in the above scenario.

Answer

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Tags: Confidentiality, Conflict of Interest, Ethics, Professional Behavior
Level: Level 3

Topic: Regulatory Framework and Ethics
Series: MAY 2020

TX – May 2019 – L3 – Q3D – Ethical principles in taxation

Examine the ethical and professional issues that tax consultants must consider when dealing with taxpayers.

Question

d) Section 18 of the Revenue Administration Act 2016 (Act 915) makes provision for the use of Tax Consultant by a taxpayer.

Required:
Examine THREE (3) ethical and professional issues that a tax consultant may consider in dealing with a taxpayer. (3 marks)

Answer

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Tags: Confidentiality, Ethical Issues, Integrity, Professional Conduct, Tax Consultancy, Taxpayer Relations
Level: Level 3

Topic: Ethical principles in taxation
Series: MAY 2019

CR – Nov 2021 – L3 – Q3c – Regulatory Framework and Ethics

Assess the ethical principles breached in a workplace scenario and recommend actions in accordance with the IFAC Code of Ethics.

Question

Linda is a junior member of an audit firm and has just returned to work after taking compassionate leave to care for her sick mother. For financial reasons, Linda needs to work full-time. Linda has been having difficulties with her mother’s home care arrangements, causing her to miss several team meetings, which usually occur at the start of each day, and she needs to leave work early as well.

In terms of her capabilities, Linda is very competent at her work, but her frequent absence puts severe pressure on her and her overworked colleagues. Linda’s manager knows that workflow through the practice is coming under intense pressure, and in order that the team’s output is not affected, had a discussion with the audit team on Linda’s circumstances. This has, however, led to some members of the audit team undermining Linda at every given opportunity, putting Linda under even greater stress.

Required:

i) In accordance with the IFAC’s code of ethics, assess THREE (3) possible fundamental ethical principles that might have been breached. (5 marks)
ii) Recommend the possible actions that the manager should take as a member of the Institute of Chartered Accountants, Ghana in dealing with this ethical dilemma. (5 marks)

Answer

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Tags: Confidentiality, Due care, Ethical dilemma, Ethics, IFAC Code, Integrity, Objectivity, Professional competence
Level: Level 3

Topic: Regulatory Framework and Ethics
Series: NOV 2021

AAA – Nov 2023 – L3 – Q1b – Professional Responsibility and Liability

Discuss measures to avoid disclosing confidential matters between two competing clients.

Question

Kankam and Partners is an audit firm providing audit services to two competing beer producers: “Pashew” and “Agyimu” breweries. The two companies run neck to neck in terms of market share, with “Pashew” holding 45% and “Agyimu” holding 40%. Advertisements run by the companies give the impression of stiff competition between the two and public perception is that they are enemies.

Required: As an Audit Manager of Kankam and Partners, discuss TWO (2) measures your firm should put in place to avoid disclosing confidential matters of the companies to each other.

Answer

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Tags: Audit Safeguards, Confidentiality, Conflict of Interest
Level: Level 3

Series: NOV 2023

AAA – Nov 2018 – L3 – Q3a – Professional responsibility and liability

Discussion on the auditor's duty under money laundering laws and confidentiality requirements.

Question

It was reported in both the print and electronic media that “the hidden wealth of some of the world’s most prominent leaders, politicians, and celebrities including former Tory MPs and six peers have been released in a massive leak. The leak came from the database of lawyer Mossack Fonseca, who was alleged to have aided the people involved to form offshore companies, which enabled them to evade tax and indulge in money laundering. This revelation has implications for professional accountants who are required to report suspicious transactions and activities of clients.”

Required:
i) Discuss the auditor’s duty under money laundering laws and regulations and the requirement of confidentiality under the IFAC’s Code of Ethics for Professional Accountants. (4 marks)

ii) Recommend elements that should be included in an anti-money laundering programmed for an accounting firm. (6 marks)

Answer

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Tags: Auditor's responsibility, Confidentiality, Money laundering
Level: Level 3

Topic: Professional responsibility and liability
Series: NOV 2018

Question Tag: Confidentiality

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AAA – Nov 2013 – L3 – SB – Q1 – Ethical Issues in Auditing

Evaluate whether to comply with a former executive’s request for audit services while addressing confidentiality in auditor-client relationships.

AAA – Nov 2016 – L3 – Q2 – Ethical Issues in Auditing

Discuss ethical and legal obligations of auditors regarding independence, confidentiality, money laundering, and client competition safeguards.

AAA – Nov 2012 – L3 – SA – Q1 – Regulatory Framework and Professional Standards

Understanding conditions under which an auditor may disclose client’s confidential information.

AAA – Nov 2011 – L3 – SA – Q5 – Ethical Issues in Auditing

Identifies exceptions where auditors may not disclose a client's confidential information.

AA – May 2016 – L2 – Q3 – Ethical Issues in Auditing

Examination of ethical issues in client engagement, fundamental ethical principles, and lawful disclosure obligations for auditors.

CSME – May 2017 – L2 – SB – Q2 – Corporate Culture and Strategy

Discuss the cultural web and the ethical principles for maintaining client confidentiality.

AA – May 2023 – L2 – SA – Q3 – Planning an Audit

Key preliminary audit activities, confidentiality characteristics, and stages of analytical review.

AA – Nov 2015 – L2 – Q5a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

Discussing the fundamental principle of duty of confidentiality in audit and assurance engagements.

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying circumstances under which a banker may disclose customer information.

CR – May 2020 – Q3b(i) – Ethical Issues in Contract Bidding

This question requires a discussion on the ethical issues related to conflict of interest, confidentiality, and professional behavior in a contract bidding scenario.

TX – May 2019 – L3 – Q3D – Ethical principles in taxation

Examine the ethical and professional issues that tax consultants must consider when dealing with taxpayers.

CR – Nov 2021 – L3 – Q3c – Regulatory Framework and Ethics

Assess the ethical principles breached in a workplace scenario and recommend actions in accordance with the IFAC Code of Ethics.

AAA – Nov 2023 – L3 – Q1b – Professional Responsibility and Liability

Discuss measures to avoid disclosing confidential matters between two competing clients.

AAA – Nov 2018 – L3 – Q3a – Professional responsibility and liability

Discussion on the auditor's duty under money laundering laws and confidentiality requirements.

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Question Tag: Confidentiality

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AAA – Nov 2013 – L3 – SB – Q1 – Ethical Issues in Auditing

Evaluate whether to comply with a former executive’s request for audit services while addressing confidentiality in auditor-client relationships.

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AAA – Nov 2016 – L3 – Q2 – Ethical Issues in Auditing

Discuss ethical and legal obligations of auditors regarding independence, confidentiality, money laundering, and client competition safeguards.

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AAA – Nov 2012 – L3 – SA – Q1 – Regulatory Framework and Professional Standards

Understanding conditions under which an auditor may disclose client’s confidential information.

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AAA – Nov 2011 – L3 – SA – Q5 – Ethical Issues in Auditing

Identifies exceptions where auditors may not disclose a client's confidential information.

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AA – May 2016 – L2 – Q3 – Ethical Issues in Auditing

Examination of ethical issues in client engagement, fundamental ethical principles, and lawful disclosure obligations for auditors.

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CSME – May 2017 – L2 – SB – Q2 – Corporate Culture and Strategy

Discuss the cultural web and the ethical principles for maintaining client confidentiality.

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AA – May 2023 – L2 – SA – Q3 – Planning an Audit

Key preliminary audit activities, confidentiality characteristics, and stages of analytical review.

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AA – Nov 2015 – L2 – Q5a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)

Discussing the fundamental principle of duty of confidentiality in audit and assurance engagements.

You're reporting an error for "AA – Nov 2015 – L2 – Q5a – Professional Ethics and Code of Conduct for Auditors (IESBA Code)"

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying circumstances under which a banker may disclose customer information.

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CR – May 2020 – Q3b(i) – Ethical Issues in Contract Bidding

This question requires a discussion on the ethical issues related to conflict of interest, confidentiality, and professional behavior in a contract bidding scenario.

You're reporting an error for "CR – May 2020 – Q3b(i) – Ethical Issues in Contract Bidding"

TX – May 2019 – L3 – Q3D – Ethical principles in taxation

Examine the ethical and professional issues that tax consultants must consider when dealing with taxpayers.

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CR – Nov 2021 – L3 – Q3c – Regulatory Framework and Ethics

Assess the ethical principles breached in a workplace scenario and recommend actions in accordance with the IFAC Code of Ethics.

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AAA – Nov 2023 – L3 – Q1b – Professional Responsibility and Liability

Discuss measures to avoid disclosing confidential matters between two competing clients.

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AAA – Nov 2018 – L3 – Q3a – Professional responsibility and liability

Discussion on the auditor's duty under money laundering laws and confidentiality requirements.

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