Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Auditors of a commercial bank was interviewed the inspection team of Nepal Rastra Bank and requested the auditors to share their views on the quality of loans of the bank to assist inspection. Will this situation affect the confidentiality clause in code of ethics?
Answer:
a) 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.
In view of the above requirement of 110.114.1 A1 (a) (ii) auditor can assist the regulator for inspection.



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