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When does an auditor need to disclose info to the third party ? (without consent )
according to me1. Certain regulatory bodies
2. When they’re personally involved in a litigation
3. public interests to do so.Suppose a waste disposal company has breached by tax regulations, environmental regulations…. the auditor has been appproached by the relevant authoirites, how should an auditor respond to this?
How do u buildup an answer for this?
Question from Kaplan text book page 60Ethical principle: confidentiality. Disclosure is permitted without client permission only if there is a legal duty ( eg in UK under money laundering laws), legal right (such as defending oneself), in the public interest (not defined and auditor should seek advice from his/her professional institute and lawyers).
In your examples, there is (in UK) no duty to disclose unless a court order is obtained. The auditor should discuss the breaches with the client (they might have been accidental) and encourage the client to confess to the authorities. If the client continues with deliberate breaches the auditor should resign (why be the auditor of a crooked client?)
If the environmental breaches were very serious there might be a public interest element (for example, if the public’s health was at risk) but professional and legal advice should be obtained.
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