ACCA Advanced Taxation (ATX) Practice Exam

Which of the following statements about ACCA's Code of Ethics and Conduct is TRUE?

1. It allows for the use of confidential information

2. It prohibits misuse of confidential information

3. It encourages taking personal advantage of client data

4. It disregards confidentiality for ex-clients

The correct answer is: It prohibits misuse of confidential information

The statement that the Code of Ethics and Conduct prohibits misuse of confidential information is accurate. This principle is fundamental in ensuring that professional accountants uphold integrity and trust in their relationships with clients and stakeholders. Confidentiality is one of the cornerstones of the professional conduct expected of accountants, emphasizing that they must not disclose any confidential information obtained during the course of their work unless there is a legal or professional right or duty to disclose. Professional accountants are required to take all reasonable steps to protect the confidentiality of their clients, which extends even after the business relationship has ended. This commitment fosters an environment of trust, ensuring that clients feel secure in sharing sensitive information without fear of it being exploited or discussed without their consent. Maintaining confidentiality is not just a guideline; it is a crucial aspect of the ethical standards that accountants are expected to uphold in their professional activities. In contrast, the other statements misrepresent the expectations set forth in the Code. For instance, it does not allow for the use of confidential information for personal gain or encourage taking personal advantage of client data, as this would directly contravene the ethics of integrity and objectivity. Additionally, confidentiality remains in effect even after a professional relationship has ended; thus, disregarding confidentiality for ex-clients is not