Question：The management of Perth, a public limited holding company, wish to be informed of any significant points arising in the reports to the management of its subsidiaries. The auditor of Perth also audits the subsidiaries. The auditor:
A. May disclose this information to the management of the holding company after obtaining permission to do so from the management of the subsidiary companies.
B. Should advise the management of the holding company that he is unable to give the information and it should be sought direct from the subsidiaries.
C. Should automatically send copies of the subsidiaries' management letters to the holding company.
D. May disclose this information if requested to by the management of the holding company, without the prior consent of the management of the subsidiaries.
The correct answer is:May disclose this information to the management of the holding company after obtaining permission to do so from the management of the subsidiary companies.
The group auditors can disclose this information to the group management but need to ensure that they do not breach the confidentiality rules for the subsidiary clients. Therefore obtaining permission first is the desired route.