Association Of Certified Fraud Examiners (ACFE)

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According to the Association of Certified Fraud Examiners’ (ACFE) Code of Professional Standards, certified fraud examiners (CFEs) are prohibited from disclosing confidential information obtained during a fraud examination without proper permissions from appropriate authority or lawful order. Therefore, the only situations when a CFE can disclose illegal acts are when the client or employer gives express permission or when ordered by the Securities and Exchange Commission (SEC). However, the CFE must alert the client or employer before agreeing to violate the confidentiality agreement. If the client or employer wishes to fight the order, the CFE is obligated to keep the information confidential until the matter is settled with respects to the …show more content…

CFEs do not have the power to subpoena the information, so a company's willingness to provide them with what they need is essential. Without it, the CFEs are unable to effectively complete their Fraud examinations. Therefore, the information provided by the companies must remain confidential unless permission is given. Disclosing illegal acts without permission enables other fraudsters come up with more ways to conceal their illegal acts. Knowing that someone else committed fraud and got caught will benefit others on what not to do. Disclosing illegal acts also impacts the company just as much as the perpetrators. The public loses corporate confidence and the innocent people go down with it. For example, ABC Company decides not to give the CFE permission to give confidential information to the SEC and challenge the order. The CFE decides to give the information to the SEC anyways. He not only violates confidentiality; he jeopardizes the entire investigation. ABC Company’s name is all over the news regarding the fraud scandal and in turn invokes the Fifth Amendment. Though they may seem guilty, they are refusing to assist in the investigation further (CFE Code of Professional Standards Intrepetation and Guidance n.d.) (Snyder 2011) (CFE Code of Professional Standards …show more content…

Unless the information is summoned or subpoenaed, the auditor cannot disclose confidential information. Furthermore, the standards created by the AICPA and ACFE illustrate the importance of confidentiality in the accounting profession. Information given by a client should always remain confidential unless permission is given. Tax examiners, on the other hand, are required to follow Internal Revenue Code (IRC) 26 U.S.C § 6103, which includes handling varying levels of disclosure. For example, written or verbal consent is required for the disclosure of a tax return to a taxpayer. However, information that negatively impacts the federal tax administration cannot be disclosed to the person requesting it. In State Audit cases, disclosure of federal tax information (FTI) is limited to what is needed to complete the audit. Therefore, the tax examiner can only disclose FTI on a need to know basis. Unauthorized disclosure of FTI is a felony with jail time and substantial fines, so it is crucial that tax examiners understand the need for taxpayer confidentiality (26 U.S. Code § 6103 - Confidentiality and disclosure of returns and return information n.d.) (AICPA Code of Conduct 2014) (CFE Code of Professional Standards 2014) (Code of Ethics

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