By James Langton

(November 16 – 14:50 ET) – The Canadian Institute of Chartered Accountants has released a report from its Conflict of Interest Task Force, recommending improvements to the profession’s rules of conduct.

The report suggests that provincial CA institutes adopt tougher rules to, “specifically address business realities concerning confidential client information and conflicts of interest”.

The report clarifies the fiduciary duties CAs owe to their clients and identifies the various types of conflicting client interests. It also outlines a process that CAs can follow to identify and address conflicts or potential conflicts, including declining a potential new client because the conflict with an existing client cannot be managed.

The CICA says that the courts have concluded that there is a strong inference that members of a firm share confidential information entrusted to them by clients. This inference should be taken as a given unless the court is satisfied that all reasonable measures have been taken to protect confidential client information.

The Supreme Court of Canada has noted that it is for the professions, not the courts, to study this matter and determine if there are institutional guarantees that will maintain confidence in the integrity of the profession.

In response to the Supreme Court’s statements, the Conflict of Interest Task Force was formed by CICA’s Public Interest and Integrity Committee and chaired by David Bonham. The objective of the task force is to ensure that the public interest is protected when actual or perceived conflicts arise in relations between CAs and their clients.

Speaking at the 2000 Canadian Business Ethics Summit in Toronto, Bob Lord, chair of the CICA board said, “Good ethics are good business. Not only do chartered accountants have a responsibility to act ethically; we also have a legal duty to act in our clients’ interests. This includes a duty to protect confidential client information and avoid conflicts of interest.”

“The need to recognize and deal appropriately with conflicting client interests has become increasingly important. The CA profession is taking action in response to this growing need,” added Lord.