- This topic has 9 replies, 2 voices, and was last updated 10 months ago by
.
- Posts
Sir i am not able to understand the logic of voluntary disclosure
There is one obligatory disclosure, where you are required by law to disclose information.
But then again in code of ethics, one of the four types of voluntary disclosure is athorised by statute….whats the difference?Also one of the voluntary disclosure is when saving professional interest. But then this case this must not be prohibited by law….right??
What i guess is
In case of obligatory disclosure….the disclosure is must.
Wherease when authorised by statute and voluntary disclosure is there….it says that you have statutory right to disclose….but you free whether to disclose or notAlso sir one last question
If for example a tax personnel or police approaches me(auditor) then
I will see his statutory authority and
If it is under obligatory disclosure i must disclose information
If not, then I CAN DISCLOSE INFORMATION EVEN THOUGH I HAVE NOT TAKEN PERMISSION OF CLIENT IN CASE IT IS POSSIBLE UNDER VOLUNTORY DISCLOSURE.
RIGHT?The statutory (legal) duty to disclose without first obtaining permission to do so mean it must be required by law, for example:
1) under the obligation of a court order; or
2) disclosure to the appropriate public authorities of law infringements (where required).2) would cover, for example, requirements to report money laundering offences under UK legislation – however, such specific legislation is not examinable in AA.
A professional duty or right to disclose (when not prohibited by law), includes, for example:
1) to comply with quality-control reviews of regulatory bodies such as ACCA;
2) to respond to an inquiry or investigation by ACCA or other regulatory body; or
3) to comply with technical standards and ethics requirements.Professional duty is a “must” e.g. if ACCA wants to inspect audit files of a sample of clients, the audit firm cannot say no on the grounds that that would be a breach of duty of confidentiality.
Professional right is a choice.
If in a particular situation there is no legal obligation, that does not mean that voluntary disclosure is an option.
For example, a policeman/taxman or some other law enforcement officer turns up at an audit firm and asks for files on an audit client, but does not have a warrant. There is no legal obligation. Even though the same person may come back with the authority (warrant), the auditor would likely be in breach of their duty of confidentiality if they were to hand over client documents voluntarily.
For professional duty to be in force…it is important not to be prohibited by law…right?
For volutary disclosure i want to ask
1) does it mean like the auditor is free whether to disclose or not in certain situations??
2) in the tax authority example, i wanted to ask if the padticular information they are asking are,based on legal advise, authorised by statute but not obligatory….then the auditor is free to disclose ….right?To your 2nd question first: For volutary disclosure i want to ask
1) does it mean like the auditor is free whether to disclose or not in certain situations??
2) in the tax authority example, i wanted to ask if the padticular information they are asking are,based on legal advise, authorised by statute but not obligatory….then the auditor is free to disclose ….right?1) essentially yes, the auditor would weigh up the options, always giving the client the opportunity to make the disclosure themselves in the first instance.
2) the “taxman” e.g. an HMRC inspector has legal powers, they don’t need to be given “advice”. I don’t know what you mean “authorised statute but not obligatory” – the law is the law, so it can’t be “not obligatory”.To your first questions – this is a general point of fact, it is not specific to the auditor’s duty of confidentiality.
The law is the law and “supreme”. When a professional body e.g. IESBA/ACCA issues a professional code of ethics of other professional standards (e.g. the ISAs are standards issued by IAASB), these are binding on members. However, they cannot “overrule” law. For example, there are certain situations in which the ISAs say the auditor should “withdraw” from an engagement (i.e. resign) but with the caveat “unless prohibited/if permitted by law”. Because in some jurisdictions, an auditor is not permitted to resign during their term of office.
sir authorized by statute is one of the ways for voluntary disclosure in acca code of ethics.
- You must be logged in to reply to this topic.