Final answer:
A CPA should not disclose confidential information contained in working papers to a CPA firm that has been engaged to audit a former audit entity without the entity's consent. Authorized quality control review boards, disciplinary bodies created under state statute, or a federal court under a valid subpoena are exceptions where disclosure is permissible or required.
Step-by-step explanation:
The subject of this question pertains to professional ethics within the field of accounting, specifically relating to the confidentiality of client information by Certified Public Accountants (CPAs).
When it comes to disclosing confidential client information without the consent of the entity, there are specific circumstances where a CPA is permitted or required to do so.
The correct answer to this question is B. CPA firm that has been engaged to audit a former audit entity.
Confidential information obtained in the course of a professional engagement should not be disclosed without proper authority or permission, except for certain circumstances such as compliance with legal proceedings or professional obligations.
Authorized quality control review boards typically have a right to access such information as part of the profession's self-regulation.
Similarly, disclosing information to a disciplinary body created under state statute may be required as part of regulatory compliance.
Lastly, a federal court that has issued a valid subpoena has the legal authority to compel a CPA to disclose information, regardless of the entity's consent. In contrast, another CPA firm looking to audit a former client does not have an inherent right to access another CPA's working papers without the client's consent.