What must a CPA do if they receive confidential information from a prospective client?

In the case of receiving confidential information from a prospective client, it is essential for a CPA to handle this information with care, as it relates to professional ethics and the trust inherent in the client-CPA relationship. The most appropriate course of action includes informing the prospective client about the nature of the confidentiality obligations that the CPA will uphold before accepting any engagement.

When a CPA receives confidential information, they must understand their ethical duty to protect that information, as it may affect the integrity and professionalism of their practice. This involves elucidating to the prospective client how their information will be treated and demonstrating a commitment to confidentiality. Doing so creates clarity in expectations and builds trust, which is foundational in any professional relationship.

By taking this step, the CPA ensures transparency and adheres to the ethical standards set both by regulatory bodies and the profession, thus fostering a responsible approach to client interactions. This also reflects the CPA’s recognition of the potential sensitivity of the information shared, regardless of whether they eventually take on the client or not.