Ethics for tax practitioners: the five IESBA principles, disclosure and conflicts

A client asks you to sign a return, but will not show you the invoices behind the expenses. Another client wants advice that favours him against a rival you also advise. A third has left your firm and a new client asks what you know about the old one. None of these needs a tax rule.

Each needs a decision about what a professional accountant may and may not do, and the exam asks you to name the principle, state what it requires, and say when you may disclose.

This topic covers the five fundamental principles of the International Ethics Standards Board for Accountants (IESBA) code, the conditions when information on taxpayers may be disclosed, and what a tax practitioner should do when there is a conflict of interest. The previous topic covered tax avoidance, evasion and planning. The next covers VAT.

Key terms in plain English

Syllabus check

This topic is in syllabus area A, introduction to taxation, tax administration and ethics (20% of marks). It covers:

• the five fundamental principles of ethics;
• the conditions for disclosing taxpayers’ information;
• what to do when there is a conflict of interest.

CAMA 2020 and ethics in tax

The Companies and Allied Matters Act 2020 (CAMA 2020) is the company law of Nigeria. The sections below apply to this topic.

The rules in more depth

Integrity

A professional accountant complies with the principle of integrity, which requires him to be direct and honest in all professional and business relationships (paragraph 111.1). Integrity implies fair dealing and truthfulness. He shall not knowingly be associated with reports, returns, communications or other information that he believes:

• contains a materially false or misleading statement;
• contains statements or information provided recklessly; or
• omits or obscures required information where the omission would be misleading.

If he provides a modified report on such information, he is not in breach. When he becomes aware that he has been associated with such information, he shall take steps to be disassociated from it (paragraph 111.3).

Objectivity

The accountant must not compromise professional or business judgment because of bias, conflict of interest or the undue influence of others (paragraph 112.1). He shall not undertake a professional activity if a circumstance or relationship unduly influences his professional judgment about it (paragraph 112.2).

Professional competence and due care

The principle requires the accountant to:

• attain and maintain professional knowledge and skill at the level needed to ensure that a client or employer receives competent service, based on current technical and professional standards and relevant legislation; and
• act diligently and in accordance with applicable technical and professional standards (paragraph 113.1).

Competent service needs sound judgment in applying knowledge and skill. Maintaining competence needs continuing awareness of technical, professional and business developments, and continuing professional development builds the capabilities to perform competently. Diligence means acting in line with the requirements of an assignment, carefully, thoroughly and on time.

He shall take reasonable steps to ensure that those who work under his authority have appropriate training and supervision (paragraph 113.2), and, where appropriate, make clients and other users aware of the limitations inherent in the services (paragraph 113.3).

Confidentiality

The accountant must respect the confidentiality of information acquired as a result of professional and business relationships (paragraph 114.1). He shall:

1. be alert to the possibility of inadvertent disclosure, including in a social setting, and particularly to a close business associate or a close family member;
2. maintain confidentiality of information within the firm or employing organisation;
3. maintain confidentiality of information disclosed by a prospective client;
4. not disclose confidential information outside the firm without proper and specific authority, unless there is a legal or professional duty or right to disclose;
5. not use the information for his personal advantage or for the advantage of a third party;
6. not use or disclose any confidential information after the relationship has ended;
7. take reasonable steps to ensure that personnel under his control, and individuals from whom he obtains advice and help, respect his duty of confidentiality.

Confidentiality serves the public interest because it allows information to flow freely from the client to the accountant in the knowledge that it will not be passed to a third party. The duty continues after the relationship ends. When changing employment or acquiring a new client, the accountant may use prior experience but not confidential information obtained earlier (paragraph 114.2).

Professional behaviour

The accountant must comply with relevant laws and regulations and avoid any conduct that he knows or should know might discredit the profession. He shall not knowingly engage in any business, occupation or activity that impairs or might impair the integrity, objectivity or good reputation of the profession (paragraph 115.1). Conduct that discredits the profession is conduct that a reasonable and informed third party would conclude adversely affects its good reputation.

In marketing and promotion he shall be honest and truthful and shall not make exaggerated claims about his services, qualifications or experience, or disparaging references or unsubstantiated comparisons to the work of others (paragraph 115.2). If in doubt about whether a form of advertising is appropriate, he is encouraged to consult the professional body.

When information on taxpayers may be disclosed

A tax practitioner may disclose information on a taxpayer, past or present, when:

1. disclosure is permitted by law;
2. disclosure is authorised by the client;
3. disclosure is required by law, for example by producing documents or giving evidence in legal proceedings, or by telling the appropriate public authorities of infringements of the law that come to light;
4. there is a professional duty or right to disclose, when not prohibited by law, for example to respond to an inquiry or investigation by a professional or regulatory body such as ICAN or CITN, to protect the practitioner’s professional interests in legal proceedings, to comply with a quality review, or to comply with technical standards and ethics requirements.

In deciding whether to disclose, the practitioner considers whether the interests of any parties, including third parties, could be harmed if the client consents; whether all relevant information is known and substantiated, because unsubstantiated facts, incomplete information and unsubstantiated conclusions weigh against disclosure; the type of communication proposed and to whom it goes; and whether the recipients are appropriate (paragraph 114.1 A2).

Conflict of interest

A conflict of interest is a threat to objectivity and can threaten the other principles. It arises when:

• the practitioner does a professional activity on one matter for two or more clients whose interests on that matter conflict; or
• his own interests on a matter conflict with the interests of a client for whom he works on that matter.

To resolve it, the practitioner:

1. documents the substance of the issue, the discussions held and the decisions made;
2. if a significant conflict cannot be resolved, takes advice from the professional body (ICAN or CITN), which he may do without breaching confidentiality if the matter is discussed anonymously, or with a lawyer under legal privilege;
3. if the conflict remains after all options, refuses where possible to stay associated with the matter, and decides whether to withdraw from the assignment or the client.

Applying the principles to a tax engagement

Why the principles matter in tax work

Tax work puts the practitioner between the client, who wants to pay as little as possible, and the authority, which wants the full amount due. Each principle protects one side of that position. Integrity keeps the returns he signs reliable. Objectivity stops the client’s wishes from shaping his judgment.

Competence and due care keep advice current with the law, which changes with each Finance Act and, from 2026, with the Nigeria Tax Act 2025. Confidentiality lets the client speak freely, which is what allows good advice. Professional behaviour protects the standing of the whole profession, including ICAN and CITN members.

The practitioner should also record why he took a decision, because records of the reasons are the best evidence of compliance if his work is later questioned by a client, the authority or the professional body. He should keep engagement letters that state the scope of the work, the limits of the service and the basis of the fee.

An engagement letter helps him to make clients aware of the limitations of the service, as paragraph 113.3 expects, and avoids disputes over what he agreed to do.

The position from 2026

The IESBA principles do not depend on the tax law and apply unchanged to engagements under the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025. The authorities named in the disclosure rules are now the Nigeria Revenue Service and the State authorities, and the professional bodies remain ICAN and CITN.

Worked examples

1. (a) Integrity: you must not be associated with information that is materially false or misleading, and you should disassociate yourself.
2. (b) Confidentiality: you must be alert to inadvertent disclosure in a social setting.

1. The request alone does not release you.
2. Ask for the legal basis. Disclose only where the law requires or permits it.
3. If unsure, take advice from ICAN or a lawyer without naming the client, and record your decision.

1. Their interests on the matter conflict, which threatens objectivity.
2. Document the issue and discuss it with the clients if you can without breaching confidentiality.
3. If it cannot be resolved, withdraw from one or both assignments.

How to score full marks

• Name the principle and give its paragraph number where you know it.
• Describe what it requires in one or two sentences.
• List the four disclosure conditions in full, with examples under the third and fourth.
• Give the three steps for a conflict in order.

Common mistakes in the exam

• Treating the duty of confidentiality as ended when the engagement ends.
• Listing only two or three disclosure conditions.
• Confusing integrity with objectivity.
• Omitting the anonymous consultation with the professional body.

Quick revision

• Five principles: integrity, objectivity, competence and due care, confidentiality, professional behaviour.
• Disclosure: permitted, authorised, required, professional duty or right.
• Conflict: document, seek advice anonymously, withdraw if needed.

Practice questions

Questions 1 to 10 are multiple choice. Questions 11 to 13 are written. Try each before opening the answer.

Model answers

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