Question

You are working as a junior accountant for a governent agency and notice some large accounting irregulaties. You investigate and find some illegal transactions have been recorded. You decide to report your findings to the external auditor. Which of the following statements is correct:

		a. You have acted in accordance with Section 140 for disclosing infringements of the law to an authorised third party.
		b. You have illegally acted as a whistleblower and may be prosecuted for releasing secret government transactions.
		c. You have breached Section 140 of the ethical guidelines by reporting confidential informaton to an external party.
		d.You must not report breaches of accounting policy to an auditor. Auditors are required to find all breaches on their own so their objectivity is not compromised.

Answer 1

The correct answer is Option 'a': You have acted in accordance with Section 140 for disclosing infringements of the law to an authorised third party.

Generally, accountants have to refrain from disclosing information to the third parties.
But as per Section 140 (Disclosure of Confidential Information), there are cases mentioned when a professional accountant may be required to disclose such confidential information.

Since the matter involves illegal transactions that are against the law, accountant has acted in accordance with section 140 (Option A)