An auditor working for CyberSec discovers that their client is actively engaged in funding terrorism. The auditor immediately reports this to the national anti-terrorism police unit, without informing the client or seeking their permission.

Has the auditor breached the IFAC principle of Confidentiality?

Answer options:

Yes, because client information can never be disclosed without explicit client permission.

Yes, because the auditor should have resigned instead of reporting the client.

No, because confidentiality only applies to financial data, not criminal acts.

No, because there is a legal and professional right or duty to disclose such information.

How to approach this question

Recall the exceptions to the Confidentiality principle. Legal obligations (like reporting terrorism) override client confidentiality.

Full Answer

D.No, because there is a legal and professional right or duty to disclose such information.✓ Correct

The principle of Confidentiality requires accountants not to disclose client information. However, there are strict exceptions: 1) Disclosure is permitted by law and authorized by the client, 2) Disclosure is required by law (e.g., anti-terrorism, money laundering), and 3) There is a professional duty or right to disclose.

Common mistakes

Believing confidentiality is an absolute rule with no exceptions.

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Practice the full ACCA BT — Business & Technology Practice Exam 5

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