Duty of confidentiality of CA under Code of Ethics

Ingredients of professional misconduct under clause (1) of Part I to the Second Schedule to the Chartered Accountants Act,1949

(i)A CA in practice discloses information acquired in the course of his professional engagement.  
(ii)Such disclosure is to any person other than his client so engaging him.  
(iii)Such disclosure is otherwise than as required by any law for the time being in force. 
(iv)Such disclosure is without the client’s consent. 

If all the above conditions (i) to (iv) are satisfied, disclosure of information by a CA in practice tantamount to professional misconduct. It does not matter whether disclosure is deliberate or unintentional. Also, it does not matter whether client’s interest is actually harmed or not.

One can see that duty of confidentiality is not an absolute on but a qualified one. If disclosure is "as required by any law for the time being in force", the CA cant be held guilty under Clause (1). So legal requirement to disclose(for example section 143(12) of the Companies Act,2013 is good defence in professional misconduct proceedings under clause (1)  especially when the legal requirement overrides the duty of confidentiality(eg section 143(13) of the Companies Act,2013)

Sub-sections (12) of section 143 casts a duty on auditor to report fraud  to the Central Govt if:

• in the course of the performance of his duties as auditor, 
• the auditor has reason to believe that an offence involving fraud is being or has been committed
• the fraud is against the company by officers or employees of the company 

Sub-sections (13) of section 143 provide as under:

• No duty to which an auditor of a company may be subject to (e.g. duty of confidentiality under the Chartered Accountants Act,1949) shall be regarded as having been contravened by reason of his reporting the matter as above if it is done in good faith. [Section 143(13)]

So if auditor reports fraud to Central Government in confirmity with Section 143(12) in good faith, he gets the benefit of protection of section 143(13) and cannot be held guilty of violating duty of confidentiality under clause (1) of Part I to the Second Schedule to the Chartered Accountants Act,1949