Certified Internal Auditor (CIA) Practice Test

What action constitutes a violation of the confidentiality concept regarding working papers?

1. Takes working papers to his/her hotel room overnight.

2. Shows working paper on occasion to engagement clients.

3. Allows the external auditor to copy working papers.

4. Misplaces working papers occasionally.

The correct answer is: Misplaces working papers occasionally.

The confidentiality concept in auditing emphasizes the importance of safeguarding sensitive information contained within working papers. Misplacing working papers can lead to unauthorized individuals gaining access to confidential data, which directly violates this principle. The essence of confidentiality is to ensure that proprietary and sensitive information is protected from exposure to unauthorized parties. On the other hand, taking working papers to a hotel room, showing them to clients casually, or allowing external auditors to copy them does not necessarily imply a violation of confidentiality if proper care and agreements are in place. For instance, there may be instances where sharing working papers with engagement clients is permissible under certain circumstances, such as revealing information necessary for collaboration, provided that confidentiality agreements are respected. Therefore, the action of misplacing working papers poses a more direct threat to confidentiality, as it can inadvertently lead to exposure without any intention or control. This reinforces the necessity for auditors to remain vigilant and organized in the handling of such documents to maintain the integrity of confidential information.