ACCA Advanced Taxation (ATX) Practice Exam

What is a fundamental principle included in ACCA's Code of Ethics and Conduct regarding client information?

1. Transparency in all business dealings

2. Confidentiality of professional information

3. Fairness to clients and third parties

4. Accountability for actions

The correct answer is: Confidentiality of professional information

The principle of confidentiality of professional information is a cornerstone of professional ethics in the ACCA Code of Ethics and Conduct. This principle emphasizes the obligation of professionals to protect the privacy of client information and not to disclose it without the explicit consent of the client or unless there is a legal or regulatory requirement to do so. Confidentiality is essential for maintaining client trust, as it assures clients that their sensitive information does not fall into the hands of unauthorized parties and is handled with the utmost care and respect. Breaching confidentiality can lead to legal repercussions and damage to the professional's reputation, as it undermines the fundamental relationship of trust between a professional and a client. In the context of the other options, while transparency, fairness, and accountability are also important ethical considerations, they do not specifically address the protection and non-disclosure of client information to the same extent as confidentiality does. Hence, the principle of confidentiality stands out as a fundamental aspect of maintaining ethical professionalism within the ACCA framework.