If you receive a request for information about your client from a third party, you have an obligation to reply promptly and professionally.

Yet it’s tempting to avoid some information requests for a range of reasons. These include the request’s complexity or the subject’s sensitivity. In some cases, you may believe that the request comes from someone who doesn’t have a right to know the information.

Who typically requests information?

Requests for information can come from several sources. These are the most common: 

• Your former client’s new accountant may send you an ethical clearance letter requesting records and documents related to the client. For a guide on how to handle this situation, refer to our article, Navigating difficult client handovers. 
• Someone associated with your client, like an ex-spouse or legal representative who wants information about a property settlement or legal matter.
• A court subpoena or police search warrant requesting information about a current or former client.
• A regulator like the Australian Tax Office, Australian Securities and Investments Commission, New Zealand’s  Inland Revenue or Financial Markets Authority. 
• A prospective financier for your client. 

What to watch out for

When considering your response, there are a few things to keep in mind. 

“It’s up to you to review the request and provide a response, even if that response is a negative. When you communicate clearly and promptly, you satisfy your professional obligations.”

Confidentiality

Disclosing confidential information about your client without your client’s consent, or a legal duty to disclose, could land you in trouble.

Client confidentiality doesn’t have an expiry date. According to R114.2 in the Code of Ethics, a member shall continue to comply with the principle of confidentiality even after the end of the relationship between the member and a client or employing organisation. 

If you don’t have your client’s consent to provide the information, you should state so in your reply to the request. Responding promptly and clearly can help prevent you from unintentionally breaching regulations. 

As part of their investigations, some regulators have the power to request information about your clients. You’re permitted to provide that information when there’s a legal imperative. If you’re unclear about what constitutes a genuine obligation, get legal advice. 

Conflict of interest

Would providing information about one client unfairly disadvantage another client? If your disclosure could create a conflict of interest between clients, you may find yourself in a difficult situation. Again, get legal advice if you’re unsure. 

Privacy laws

Various privacy laws protect an individual’s information. For example in Australia, the Privacy (Tax File Number) Rule 2015 states who can ask for and receive an individual’s Tax File Number (TFN). You can’t disclose TFN information unless permitted under taxation, personal assistance or superannuation law. In New Zealand the Privacy Act 2020 governs how your practice can collect, store, use and share personal information

If in doubt, get legal advice. 

Exercise your professional judgment

It’s up to you to review the request and provide a response, even if that response is a negative. When you communicate clearly and promptly, you satisfy your professional obligations. Failing to respond or ignoring the request in the hope that the sender accepts a non-answer is not permissible. In fact, failing to respond may lead to a complaint about you to CA ANZ. 

If you don’t have the information readily available or it’s going to take time to compile, advise the requestor and provide an estimated timeframe. 

Australian members: CA ANZ Regulation CR3.8 Attention to Correspondence and Enquiries states that professional correspondence and enquiries must be responded to “expeditiously”.  

New Zealand members: NZICA Code of Ethics NZ R115.3 requires you to act with “courtesy and consideration”.

Although there’s no set time frame, this means you’re expected to respond promptly and efficiently.

If the request is extensive, requiring considerable resources, consider raising the issue of billing with your client. If you plan to bill your client for the work, get written agreement from your client, either by issuing an amended engagement letter or entering into a separate engagement to compile the information.

When responding to the requestor, provide only the essential information requested – no more, no less. Lastly, remember to be clear and factual in your response. 

FMA: Information gathering  

The FMA’s general information gathering powers can be found in section 25 of the Financial Markets Authority Act 2011 and other powers of inspection in the relevant financial markets legislation. The Companies Office powers of inspection are set out in the various acts that it administers.