Need help understanding this AUD question.

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  • #192982
    Anonymous
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    So far using becker to study for AUD has gone well. I don’t always see the right answer, but I can almost always eliminate three of them. This questions however has one wrong answer that I just do not see the connection between the answer and the reason for why its not the right answer.

    Question: In which of the following situations is there a violation of client confidentiality under the AICPA Code of Professional Conduct?

    one of the INCORRECT answers states that “A member discloses confidential client information to a professional liability insurance carrier after learning of a potential claim against the member.”

    Reason why INCORRECT: “A member is required to disclose confidential client information if necessary to comply with a validly issued subpoena or summons. Therefore, a disclosure of confidential information to a professional liability insurance carrier after learning of a claim against the member would not violate confidentiality rules.”

    Isn’t this answer basically saying that the auditor is giving up confidential client information in order to protect him/herself against a claim made by the client against the auditor? I thought that was NOT ok?

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