Question

10. One morning a police officer and an attorney come by your office to discuss a client who owns a restaurant. They have evidence that the buyer is stealing from your client and want to talk about the internal control environment. You call your client, who says it is fine to discuss these matters. After a brief discussion of the internal control they ask for copies of cancelled checks so they can compare signatures. They also ask for copies of your client’s personal and corporate tax returns. How would you respond to:

a. discussing the internal control environment?

b. providing copies of cancelled checks?

c. giving them copies of the tax returns?

Answer 1

Responses to the information asked:

• Discussing Internal control Environment - we should not disclose the confidential information of the client unless with the prior permission of the client & if it is the legal duty to disclose such information.So, we can Discuss the internal control environment as the permission of the client is obtained to discuss.
• Providing copies of cancelled checks - Can provide the copies as we are legally bind to produce any evidence as part of investigation.
• Giving them copies of the tax returns -  Ask for the relevance of the tax returns for investigation and then only have to provide the same. otherwise no need to disclose such confidential info unless the client permits to do so.