Question

What is the ethical confidentiality? The importance of the ethical confidentiality in an organization and when maintaining accounting records, how can ethical confidentiality protect, controls, avoid the organization or a company from a certain fraud.

(Making sure to connect it with managerial accounting practices).

Answer 1

An individual should protect the confidentiality of any professional or any personal information about any person or any organisation. Confidential means the information/data to be served to only those people/individuals for whom it is useful. Ethical confidentiality means to keep the secret/important information only upto you don't let others know about that information.

In an organisation for maintaining the accounting records, there are lots of chances of frauds sometimes its from own employees so the segregation of duties is performed to keep only the related data to the employees. Ethical confidentiality maintains the organisation from frauds of likewise their contracts with clients and clients private deals and business process of the organisation. The management should also provide only required information to individuals not the information of the secret business formula or their clients all details and information that may be helpful for the competitors in the market.