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Section 140 - Confidentiality: Confidential Information Acquired As A Result of Professional and Business Relationships

This section discusses confidentiality requirements for professional accountants. It states that confidential information acquired through work should not be disclosed without permission and should not be used for personal gain. It describes circumstances where disclosure may be required or appropriate, such as when authorized by the client or required by law. It also provides factors to consider when deciding whether to disclose confidential information, such as whether all relevant information is known and if the intended recipients are appropriate. The section emphasizes maintaining confidentiality even after professional relationships end.

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Kathlyn Ann Masil
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50 views

Section 140 - Confidentiality: Confidential Information Acquired As A Result of Professional and Business Relationships

This section discusses confidentiality requirements for professional accountants. It states that confidential information acquired through work should not be disclosed without permission and should not be used for personal gain. It describes circumstances where disclosure may be required or appropriate, such as when authorized by the client or required by law. It also provides factors to consider when deciding whether to disclose confidential information, such as whether all relevant information is known and if the intended recipients are appropriate. The section emphasizes maintaining confidentiality even after professional relationships end.

Uploaded by

Kathlyn Ann Masil
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Section 140 - Confidentiality

Confidential Information acquired as a result of professional and business relationships:


1. Should not be disclosed outside the firm or employing organization without proper and specific authority, unless there is a legal or professional right or duty to disclose

2. Should not be used for personal advantage or advantage of third parties

Section 140 - Confidentiality


circumstances where professional accountants are or may be required to disclose confidential information or when such disclosure may be appropriate: (1.) disclosure authorized by client and permitted by law

(2.) disclosure required by law (3.) disclosure required as a part of professional duty or right to disclose and permitted by law

Section 140 - Confidentiality


In deciding whether to disclose confidential information, professional accountants should consider the following points:
(a) Whether the interests of all parties, including third parties whose interests may be affected, could be harmed if the client or employer consents to the disclosure of information by the professional accountant; (b) Whether all the relevant information is known and substantiated, to the extent it is practicable; when the situation involves unsubstantiated facts, incomplete information or unsubstantiated conclusions, professional judgment should be used in determining the type of disclosure to be made, if any; and (c) The type of communication that is expected and to whom it is addressed; in particular, professional accountants should be satisfied that the parties to whom the communication is addressed are appropriate recipients.

Section 140 - Confidentiality


A professional accountant should maintain confidentiality even in a social environment. The professional accountant should be alert to the possibility of inadvertent disclosure, particularly in circumstances involving long association with a business associate or a close or immediate family member.
A professional accountant should take all reasonable steps to ensure that staff under the professional accountants control and persons from whom advice and assistance is obtained respect the professional accountants duty of confidentiality.

the principle of confidentiality continues even after the end of relationships between a professional accountant and a client or employer.

Section 200 Introduction


Threats Nature and significance of threats may differ depending on the provision of services to: 1) Financial statement audit client 2) Non-financial statement audit 3) Non-assurance client Note: Give examples of each of this clients and a threat in which the three differs

Section 200 Introduction (Self interest Threats)


Examples of circumstances that may create selfinterest threats for a professional accountant in public practice includes but are not limited to:

1) A financial interest* in a client or jointly holding a financial interest with a client. 2) Undue dependence on total fees from a client.

Section 200 Introduction (Self interest Threats)


3) Having a close business relationship with a client. 4) Concern about the possibility of losing a client. 5) Potential employment with a client. 6) Contingent fees* relating to an assurance engagement.

Section 200 Introduction (Self review Threats)


Examples of circumstances that may create self-review threats for a professional accountant in public practice includes but are not limited to: 1) a professional accountant discovering a significant error when evaluating the results of a previous professional service performed by a member of the professional accountants firm
2) reporting on the operation of financial systems after being involved in their design or implementation.

Section 200 Introduction (Self review Threats)


3) Having prepared the original data used to generate records that are the subject matter of the engagement. 4) A member of the assurance team being, or having recently been, a director or officer* of that client. 5) A member of the assurance team being, or having recently been, employed by the client in a position to exert direct and significant influence over the subject matter of the engagement.

6) Performing a service for a client that directly affects the subject matter of the assurance engagement.

Section 200 Introduction (Advocacy Threats)


Examples of circumstances that may create advocacy threats include, but are not limited to: 1) Promoting shares in a listed entity* when that entity is a financial statement audit client. 2) Acting as an advocate on behalf of an assurance client in litigation or disputes with third parties.

Section 200 Introduction (Safeguards within the Clients Systems and Procedures)
1) When a client appoints a firm in public practice to perform an engagement, persons other than management ratify or approve the appointment.

2) The client has competent employees with experience and seniority to make managerial decisions.

Section 200 Introduction (Safeguards within the Clients Systems and Procedures)
3) The client has implemented internal procedures that ensure objective choices in commissioning non-assurance engagements. 4) The client has a corporate governance structure that provides appropriate oversight and communications regarding the firms services.

Section 210 Professional Appointment


Client Acceptance
Consider whether acceptance would create any threats to compliance with the fundamental principles (integrity and professional behavior(what other principles?)
Potential Threats 1) If there are Questionable issues associated with the client like:
1) Client Involvement in Illegal Activities 2) Dishonesty 3) Questionable Financial Reporting Practices

Safeguards 1) Obtaining knowledge of the client, its owners, managers and those responsible for its governance and business activities 2) Securing the clients commitment to improve corporate governance practices or internal controls

Section 210 Professional Appointment


Engagement Acceptance
Consider whether acceptance would create any threats to compliance with the fundamental principles (professional competence and due care)
Potential Threats 1) The engagement team does not possess, or cannot acquire, the competencies necessary to properly carry out the engagement Safeguards

1) Acquiring an appropriate understanding of the nature of the clients business, the complexity of its operations, the specific requirements of the engagement and the purpose, nature and scope of the work to be performed.

Section 210 Professional Appointment


2) Acquiring knowledge of relevant industries or subject matters. 3) Possessing or obtaining experience with relevant regulatory or reporting requirements. 4) Assigning sufficient staff with the necessary competencies. 5) Using experts where necessary. (see book for further reference) 6) Agreeing on a realistic time frame for the performance of the engagement. 7) Complying with quality control policies and procedures designed to provide reasonable assurance that specific engagements are accepted only when they can be performed competently.

Section 210 Professional Appointment


Changes in A Professional Appointment

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