You have recently been appointed as auditor to Johnson Plc; a company whose shares are traded on the Stock Exchange. The Directors of Johnson Plc have recommended that you perform the following services . (i) The statutory audit of the annual financial statements. (ii) Taxation services, and (iii) Consistency services in respect of the implementation of a new information technology system Your firm has not acted for Johnson Plc before but does act as auditor for one of the major competitors. (c) A client’s affairs should not be disclosed to third parties. However where a client has been guilty of an unlawful act, to whom should the auditor disclose this, and in what order ?
You have recently been appointed as auditor to Johnson Plc; a company whose
shares are traded on the Stock Exchange. The Directors of Johnson Plc have
recommended that you perform the following services .
(i) The statutory audit of the annual financial statements.
(ii)
(iii) Consistency services in respect of the implementation of a new information
technology system
Your firm has not acted for Johnson Plc before but does act as auditor for one of the
major competitors.
(c) A client’s affairs should not be disclosed to third parties. However where a client
has been guilty of an unlawful act, to whom should the auditor disclose this, and
in what order ?
Auditors are bound by ethical and professional standards that require them to maintain client confidentiality. However, there are circumstances where auditors may need to disclose information related to a client's unlawful acts. In this response, we will discuss the principles of client confidentiality and the circumstances under which an auditor should disclose a client's unlawful act and to whom such disclosures should be made.
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