ACCA Advanced Taxation (ATX) Practice Exam

What is a critical ethical principle regarding client information within the ACCA Code of Ethics?

1. Transparency of information

2. Confidentiality of information

3. Financial gain from information

4. Sharing of information with other clients

The correct answer is: Confidentiality of information

The critical ethical principle regarding client information within the ACCA Code of Ethics is confidentiality of information. This principle emphasizes the obligation of professionals to protect the privacy of their clients by ensuring that sensitive information is not disclosed without proper authority. Upholding confidentiality is essential in fostering trust between the client and the professional, as clients must feel secure that their personal and financial details will remain private. The principle of confidentiality not only safeguards the interests of clients but also upholds the integrity of the profession as a whole. Breaching confidentiality can lead to severe consequences, including legal repercussions and damage to a professional’s reputation. This principle ensures that professionals refrain from using sensitive information for personal gain or sharing it with unauthorized parties, which is a core aspect of maintaining professional conduct. In contrast, while transparency of information is important in some contexts, it must coexist with confidentiality. Financial gain from information or sharing information with other clients directly undermines the trust necessary for effective client relationships and violates the principle of confidentiality. Thus, confidentiality stands out as the paramount ethical obligation in managing client information within the ACCA framework.