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L5bAudit and assurance

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Audit and Assurance

Lecture 5b

Confidentiality

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L5bAudit and assurance

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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

• 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)

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L5bAudit and assurance

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• 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

Common law (UK) - Chinese walls

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• Requirements for a valid ‘Chinese Wall’

1. Physical separation of departments

2. Training about treatment of confidentiality

3. Strict, defined procedures (including recording) when crossing

the wall

4. Compliance officers monitoring effectiveness of wall

5. Disciplinary sanctions for breaches(Refer the Prince Jefri case - http://sunzi1.lib.hku.hk/hkjo/view/15/1501616.pdf )

Common law (UK) - Chinese walls

theUNIVERSITYofGREENWICH

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L5bAudit and assurance

J. E. Spencer-Wood

Further reading

• House of Lords (1998) Prince Jefri Bolkiah v. K.P.M.G• http://www.publications.parliament.uk/pa/ld199899/ldjudgmt/jd98

1218/prince01.htm

• Kelly, E. (1999) Hong Kong Lawyer• http://sunzi1.lib.hku.hk/hkjo/view/15/1501616.pdf