The disclosure of possible fraud to parties other than the client's senior management and its audit committee ordinarily is not part of the auditor's responsibility and ordinarily would be precluded by the auditor's ethical or legal obligations of confidentiality unless the matter is reflected in the auditor's report. The auditor should recognize, however, that in the following circumstances a duty to disclose to parties outside the entity may exist:
- To comply with certain legal and regulatory requirements fn 39
- To a successor auditor when the successor makes inquiries in accordance with section 315, Communications Between Predecessor and Successor Auditors fn 40
- In response to a subpoena
- To a funding agency or other specified agency in accordance with requirements for the audits of entities that receive governmental financial assistance fn 41
Because potential conflicts between the auditor's ethical and legal obligations for confidentiality of client matters may be complex, the auditor may wish to consult with legal counsel before discussing matters covered by paragraphs .79 through .81 with parties outside the client.