a) What is the requirement of Code of Ethics regarding use and disclosure of confidential information of client acquired a professional accountant as a result of his service to the client?
b) What are the fundamental principles of the Code of Ethics issued ICAN?
c) A Chartered accountant who is a member of ICAN is a full-time employee of ABCD & Associates (a CA firm registered with ICAN). During the audit of an INGO from his firm (ABCD), he was requested the client to audit a partner organization of INGO in his personal capacity. Shall he accept the appointment of auditor of Partner Organization of INGO?
a) Use and Disclosure of Confidential Information of Client:
The principle of confidentiality imposes an obligation on all professional accountants to maintain confidentiality of information acquired as a result of professional or business relationship unless there is legal or professional right or duty to disclose. However, there are certain circumstances when confidential information can be disclosed.
As per 110.114 of the Code of Ethics of ICAN provides the circumstances where confidential information can be disclosed as below
a. When disclosure is authorized.
b. When disclosure is required law.
c. When there is a professional duty or right to disclose.
i) To comply with the quality review of a professional body;
ii) To respond to an inquiry or investigation a professional or regulatory body;
iii) To protect the professional interests of a professional accountant in legal proceedings; or
iv) To comply with technical and professional standards, including ethics requirements.
b) Fundamental Principles of Code of Ethics: There are the following fundamental principles:
i. Integrity – to be straightforward and honest in all professional and business relationships
ii. Objectivity– to not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
iii. Professional Competence and Due Care – to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service.
iv. Confidentiality– neither discloses any confidential information to third parties without proper and specific authority nor use the information for the personal advantage of the professional accountant or third parties.
v. Professional Behavior – to comply with relevant laws and regulations and avoid any action that discredits the profession.
c) Audit a CA member in employment: As per decision of the council of ICAN, a CA member of ICAN who is in full time employment is not entitled to hold active Certificate of Practice. In other words, a CA member can either be in full time employment or in practice (also popularly known as one man one profession). So, in the give case the CA member should not accept the audit assignment in his personal name.