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[Prenuptial Agreement] Norah Performed Accounting Services for Joel's Used Car

Question 68

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[Prenuptial Agreement] Norah performed accounting services for Joel's used car business. She had a contract with Joel to the effect that she would audit his books and financial statements for his own use, not for the purpose of obtaining loans. In auditing Joel's business, she developed various notes, calculations, memorandums, and other papers. Gloria, Joel's fiancé, approached Norah to inquire about Joel's business. Gloria and Norah had been friends for many years. Norah allowed Gloria to look at the various notes, calculations, and other papers resulting from her review of Joel's financial statements and other records. Gloria told Norah that she really needed to investigate Joel because they were thinking of getting married, and she believed he had a legal obligation to disclose the information to her because of negotiations involving a prenuptial agreement. Norah agreed and proceeded to discuss Joel's finances with Gloria, revealing all the information that Joel had disclosed to her. Gloria broke up with Joel, telling him that after what she discovered from Norah, she was concerned about Joel's finances. Joel was very angry with Norah and told her that she was unethical and had violated the accountant-client privilege.
-Assuming that Norah discussed with Gloria confidential communications that she had with Joel, which of the following is true regarding the ethical nature of that communication?


A) Norah did not commit an ethical violation in disclosing information to Gloria unless there was a state law providing for an accountant-client privilege.
B) Regardless of whether a state law existed providing an accountant-client privilege, federal statutory law deems such conduct unethical.
C) Norah did not commit an ethical violation because negotiations regarding a prenuptial agreement were involved.
D) Norah committed an ethical violation but only because Gloria was not yet married to Joel.
E) Norah committed an ethical violation.

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