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Audit and Assurance

Audit and Assurance. Lecture 5b Confidentiality. Confidentiality. There is a professional duty not to disclose information about a client (without consent) In the UK the duty of confidentiality is an implied contractual duty

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Audit and Assurance

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  1. Audit and Assurance Lecture 5b Confidentiality

  2. Confidentiality • There is a professional duty not to disclose information about a client (without consent) • In the UK theduty of confidentiality is an implied contractual duty • In some circumstances fraud must be reported to an appropriate proper (third party) authority in the public interest (fe police, FSA regulatory bodies, HMRC, SE)

  3. Common law (UK) - Chinese walls • A ‘Chinese Wall’ • A physical separation of departments and information within an audit firm • To prevent the use of data in non-audit contexts without a client’s permission

  4. Common law (UK) - Chinese walls • Requirements for a valid ‘Chinese Wall’ • Physical separation of departments • Training about treatment of confidentiality • Strict, defined procedures (including recording) when crossing the wall • Compliance officers monitoring effectiveness of wall • Disciplinary sanctions for breaches (Refer the Prince Jefri case -http://sunzi1.lib.hku.hk/hkjo/view/15/1501616.pdf)

  5. Further reading • House of Lords (1998) Prince Jefri Bolkiah v. K.P.M.G • http://www.publications.parliament.uk/pa/ld199899/ldjudgmt/jd981218/prince01.htm • Kelly, E. (1999) Hong Kong Lawyer • http://sunzi1.lib.hku.hk/hkjo/view/15/1501616.pdf

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