Everyday ethics: Confidentiality, objectivity and competitors

As told to Susan Muldowney

Question: “I am a public practitioner conducting advisory work for a long-standing client — a family-owned logistics company. I have accessed sensitive commercial information during the engagement, including pricing strategies and upcoming tender submissions. 

Now I have been assigned to assist another client at the firm — a second logistics company that is their direct competitor, and whose director is a cousin of one of the directors of the first client.

I am aware that both families have a strained relationship stemming from a past business dispute. I also know the second client is preparing a bid for the same government contract and would greatly benefit from learning the pricing details of the first client.

Our senior partner hinted that it would be ‘better for the firm’ if the second client secures the tender, as they are more likely to commit to a long-term engagement with us. How should I manage a situation where firm loyalty, family loyalties and professional obligations are competing?”

Answer: This scenario highlights one of the most important realities of professional ethics. Conflicts of interest are rarely simple, and they often emerge gradually rather than all at once.

At the heart of the issue are the five fundamental principles outlined in APES 110: Code of Ethics for Professional Accountants — integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. 

These principles govern the professional conduct of accountants and, in this case, confidentiality and objectivity are under immediate threat. 

The first issue to consider is whether you should have been assigned to the second engagement. You already possess commercially sensitive information about the first client, including pricing strategies and tender intentions. 

Even if you never intentionally disclose that information, your knowledge creates an unavoidable conflict, risking your ability to remain objective with respect to either client.

Many professionals assume they can mentally “separate” information and simply avoid mentioning confidential details. But the challenge is much deeper than that. 

To properly advise your clients, you need to act in their best interests. Yet doing so without drawing upon your existing knowledge may limit your ability to provide complete advice. 

Conversely, using that knowledge — even indirectly — risks breaching confidentiality obligations owed to the first client. In this case, it is not possible to act in the best interests of both clients.

The senior partner’s comments make the situation even more problematic. Suggesting that one client should be prioritised because they may generate more revenue for the firm introduces a clear self-interest threat, further risking your ability to remain objective. 

Ethical judgement becomes compromised when commercial pressures start influencing professional responsibilities.

This is often where ethical decision-making becomes most difficult. People naturally rationalise questionable conduct when they feel pressure to support the business, satisfy senior management or protect a client relationship. However, commercial benefit should never override professional obligations.

So what should you do in this instance?

The first step is to formally decline involvement in the second engagement. You should clearly explain that you already hold confidential information relating to a direct competitor and therefore cannot act objectively or appropriately in the matter.

Second, document your concerns carefully. If pressure continues, escalate the matter internally through appropriate governance or ethics channels. Seniority does not excuse unethical conduct, and the fact that the pressure is coming from a partner makes it even more important that the issue is formally raised.

The firm itself may still decide to act for both clients, but robust safeguards must be implemented. This would typically involve entirely separate teams, strict information barriers and strong internal controls to ensure confidential information cannot pass between engagements. 

In some cases, firms may determine that even these safeguards are insufficient to maintain objectivity and choose not to proceed with one of the engagements at all.

Ultimately, ethical practice is not just about avoiding wrongdoing — it is about recognising situations where your professional obligations can no longer coexist. When confidentiality, objectivity and client trust are all at risk, stepping away is not a failure to support your firm. It is exactly what professional integrity requires.

 

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