The confidential accounting rule envisions a situation where any accountant within the public practice ought not to disclose any confidential information without informing the client. At the same time accountants should always maintain the confidential information of his employer and should not disclose any information that was obtained emanating from the employment relationship (Hey, 2009). The case at point is an advertising agency that is paying its models low wages whereby they exclude the time spent in preparation for the photo shoots. Within the area there the hotline for contacting the labor board and once appropriate reports are made there is prospect of good compensation from the board.
In this scenario one ought not to call the hotline so as to disclose the information he knows about the client. First it is against the accounting principle to do that without the client consent. One of the major motivations in this case was the provision of incentives upon reporting. The incentive in this case was for the labor board to award one 20% of the money that was to be collected as a result. Critically, looking at that is more of making a personal gain from an existing problem which is not as per the code of conduct for the accounts. By disclosing the information, which was to highly harm the business of the clients in terms of reputations and revenues. In as far as the issues at hand goes ahead to breach the law accountants can only use the option of reporting confidentiality information breaching the law when there is a judge order to do so to avoid legal liability. In that way, the legality of the act does not arise in this case for the accountant to report the case (Sarte, 2014). Before he could even think of calling it was fair for him to inform the client and obtain the consent. Obliviously, the client was not going to subscribe to this idea and the information was likely to remain undisclosed.
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With regard to the differences between mine and that of the authors I agree with his opinion. However, I do not subscribe to aspect that the client had high expectations of this confidential information to remain undisclosed. They may be chances that he was not are of the practice or the practice was wrong. Therefore, the accountant had to ascertain that by first informing him of the malpractice.
In this case the confidential information can be viewed as that of external disclosures. In other words the information is supposed to be shared with third parties who are the labor board that does not fall among the categories allowable for the accountants to disclose information to such as the CPA body. The aspect of disclosing confidential information has been explained above which as forms part of the situation (Muczyk, Smith, & Davis, 2008) . On the issue of how the client would like the information to remain confidential there are various issues. First, it may that was the main source for his revenues or where he leverages profits most. Secondly, by disclosing that he was to be subjected to legal proceedings that my turn costly to his business. On the side of the possible consequences there is the aspect of lower profits margins for his business. Legal issues may come up with jail terms that may not be favorable to the client. In conclusion, all accountants should strive to maintain the confidentiality of their client’s information and share it out only and permissible accounting policies.
References
Hey, E. (2009). Keeping confidential information confidential. The Lancet , 373(9664), 630.
Muczyk, J., Smith, E., & Davis, G. (2008). Holdings accountants accountable: Why audits fail, how they can succeed. Long Range Planning , 20(4), 129.
SARTE, P. (2014). When Is Sticky Information More Information?. Journal of Money, Credit And Banking , 46(7), 1345-1379.
