Representatives of the IESBA Consultative Advisory Group (CAG) member organizations and IESBA CAG Chair, along with the IESBA Chair and members, discuss key aspects of the IESBA's standard, Responding to Non-Compliance with Laws & Regulations, including its relevance to various constituencies, including:
The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released a new standard, Responding to Non-Compliance with Laws and Regulations. The standard sets out a first-of-its-kind framework to guide professional accountants in what actions to take in the public interest when they become aware of a potential illegal act, known as non-compliance with laws and regulations, or NOCLAR, committed by a client or employer.
The standard applies to all categories of professional accountants, including auditors, other professional accountants in public practice, and professional accountants in organizations, including those in businesses, government, education, and the not-for-profit sector. It addresses breaches of laws and regulations that deal with matters such as fraud, corruption and bribery, money laundering, tax payments, financial products and services, environmental protection, and public health and safety.
“This standard not only raises the ethical bar for the global accountancy profession but also provides an opportunity for it to demonstrate its unflagging commitment to act in the public interest,” said IESBA Chairman Dr. Stavros Thomadakis. “The standard reinforces the public interest role that professional accountants play in stimulating more trustworthy and accountable organizations, and in helping to protect stakeholders and the general public from substantial harm that may stem from breaches of laws and regulations.”
Among other matters, the new standard provides a clear pathway for auditors and other professional accountants to disclose potential non-compliance situations to appropriate public authorities in certain situations without being constrained by the ethical duty of confidentiality. It also places renewed emphasis on the role of senior-level accountants in business in promoting a culture of compliance with laws and regulations and prevention of non-compliance within their organizations.
“The board carefully calibrated the standard based on the rich and diverse input from a wide range of stakeholders to ensure that it is proportionate and, importantly, globally operable,” said IESBA Technical Director Ken Siong, adding, “The standard fills a gap in jurisdictions where legislation or regulation does not address professional accountants’ responsibilities in these situations, and by providing helpful guidance it may well complement legislation or regulation in jurisdictions that do address it. This has been a long journey, and now it’s time for national standard setters, professional accountancy organizations, and accounting firms to adopt and implement the standard.”
The standard is the result of an extensive six-year consultative process, including two Exposure Drafts, three global roundtables in Hong Kong, Brussels, and Washington, DC, and extensive outreach to the global regulatory community, international policy-making organizations, investors, preparers, the corporate governance community, national standard setters, accounting firms, professional accountancy organizations, and other stakeholders. In developing the standard, the Ethics Board also liaised closely with the International Auditing and Assurance Standards Board (IAASB) so that the new standard and the IAASB’s International Standards on Auditing are aligned.
For an overview of the standard, see the At-a-Glance document. For a summary of the board’s decisions in response to significant comments from respondents on the May 2015 Exposure Draft, see the Basis for Conclusions. Additional resources, including a fact sheet and video Q&A series, are available on the NOCLAR web page.
To access the standard, visit the IESBA website: www.ethicsboard.org. The standard will be effective July 15, 2017, with early adoption permitted.
About the IESBA
The IESBA is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information.
About IFAC
The International Federation of Accountants® (IFAC®) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
Learn all about the IESBA's Pronouncement, Responding to Non-Compliance with Laws & Regulations, including key outcomes the standard seeks to achieve, who will be affected by the standard, and what national professional accountancy organizations and others can do to support the standard.
To further support transparency, adoption, and implementation of international standards, as well as the public interest, the International Federation of Accountants® (IFAC®) today published comprehensive profiles of IFAC member organizations and the jurisdictions in which they operate.
This in-depth information demonstrates the widespread use of international standards and the efforts of IFAC member organizations to encourage adoption, advance implementation, and support the businesses, communities, and governments in their nations. It also emphasizes the crucial role of IFAC member organizations in further strengthening the quality of the accountancy profession and the need to strategically focus attention and resources.
“High-quality, internationally accepted standards for the accountancy profession are crucial to enhancing confidence and stability in the global economy,” said IFAC President Olivia Kirtley. “Publishing this information is a significant milestone in reporting the progress on adoption of international standards made by IFAC member organizations, national standard setters, regulators, and other stakeholders.”
Profiles for an initial 62 IFAC member organizations and 48 countries are now available on the IFAC website. Each country profile includes a description of the regulatory and legal landscape for the accountancy profession in that jurisdiction and an assessment of the adoption of international standards for audit, ethics, education, and public and private sector accounting, as well as the establishment of quality assurance and investigative and disciplinary systems. Member organization profiles also include information on compliance with the IFAC Statements of Membership Obligations.
“We are really pleased to take this significant step forward by providing more information about the global profession,” said Sylvia Tsen, IFAC Senior Director, Quality and Member Relations. “These profiles provide enhanced transparency that will help the public better understand jurisdictional landscapes—legal, regulatory, oversight, and more—and better understand the ongoing work of IFAC member organizations in further strengthening the entire profession—and the global economy.”
This information was compiled by IFAC staff drawing from multiple sources, including the information collected through the IFAC Member Compliance Program and the member organizations themselves. Remaining profiles will be published in the coming months and content will be updated annually.
About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in over 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
This staff-prepared Basis for Conclusions provides a summary of the board’s decisions in response to significant comments from respondents on the May 2015 Exposure Draft.
It relates to, but does not form part of the IESBA Pronouncement, Responding to Non-Compliance with Laws and Regulations.
This standard sets out a framework to guide auditors and other professional accountants in what actions to take in the public interest when they become aware of a potential illegal act, known as non-compliance with laws and regulations, or NOCLAR, committed by a client or employer.