Accounting · Professional Ethics
During the course of an audit, a suspicious cash transfer indicating potential money-laundering is identified. Which of the following statements is true regarding the auditor's duty of confidentiality?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To maintain confidentiality, the firm must report their concerns anonymously to the regulatory body
- 2The auditor is strictly prohibited from disclosing details to external bodies because the information was obtained during the audit
- 3A legal requirement to report suspected money-laundering overrides the professional principle of confidentiality✓
- 4Details of the transaction can only be disclosed to authorities with the explicit permission of the client
Correct answer
A legal requirement to report suspected money-laundering overrides the professional principle of confidentiality
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