ASSURANCE Confidentiality

Version- N17

01. Why is confidentiality important?

Confidentiality is an important matter for clients and assurance providers. Clients are exercising
a degree of trust in their assurance providers, giving them unprecedented access to information
about the company which most companies would believe to be sensitive, and in some cases
highly commercial

02. Discuss the security procedures which might be wise to prevent accidental disclosure of
information?
[Or] What are the safeguards to confidentiality?

Following security procedures to prevent accidental disclosure of information;

▪ Not discuss client’s matters outside of accountancy firm,
▪ Not discuss client’s matters with team members in a public place,
▪ Not leave audit files in unsecured places,
▪ Not remove working papers from the office,
▪ Not work on electronic systems unless protected.

03. What should be your actions if you are compelled by the law that you have to disclose confidential
information of your client in the public interest?

As an auditor for the public interest I have to disclose confidential information of my client and in
addition to this I also inform my client about the fact of compelling by the law to disclose that.

04. How will you manage conflict of interest in accepting an assurance client?

Before taking any new client, audit firm should identify whether any conflicts of interest exist. If
there is no conflict of interest, firms may accept the assignment.
If there is any conflict of interest exists and these can be managed by taking safeguards, sufficient
disclosure should be made to the client, together with details of any proposed safeguards to
preserve confidentiality and manage conflict. If the client refuses to give the consent then the
auditor must not continue to act.

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05. How an auditor can maintain ‘Chinese Walls’ to safeguard clients’ confidentiality?

Following ways an auditor can maintain ‘Chinese Walls’ to safeguard clients’ confidentiality;
▪ Ensuring that there is no overlap between different teams,
▪ Physical separation of teams,
▪ Careful procedures for where information has to be disseminated beyond a barrier and for
maintain proper records where this occurs.

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