Proposed amendments: Responding to non-compliance with laws and regulations
FINANCIAL REPORTING INSIGHTS |
In May 2015, the International Ethics Standards Board for Accountants (IESBA) issued a Re-Exposure Draft, Responding to Non-compliance with Laws and Regulations, to help guide accountants in dealing with acts or suspected acts of non-compliance with laws and regulations (NOCLAR). Under this proposal, the accountant would have the right to disclose an identified or suspected act of NOCLAR to an appropriate authority if the accountant determines such disclosure is an appropriate course of action in the circumstances. If the accountant determines such a disclosure is appropriate, it will not be considered a breach of the duty of confidentiality.
Certain of the standards of the International Auditing and Assurance Standards Board (IAASB), however, do not explicitly recognize this proposed right to disclose an identified or suspected act of NOCLAR. To address inconsistencies in the approach to identifying and dealing with instances of NOCLAR, in July 2015, the IAASB issued an Exposure Draft, Proposed Amendments to the IAASB’s International Standards: Responding to Non-Compliance or Suspected Non-Compliance with Laws and Regulations. If finalized, this proposal would make limited amendments to certain existing standards, primarily to bring key aspects of the IESBA’s NOCLAR proposal to the auditor’s attention and to reflect changes to the auditor’s duty of confidentiality - particularly the legal or ethical duty or right to disclose identified or suspected acts of NOCLAR.
The IESBA Re-Exposure Draft is available for comment until September 4, 2015 and the IAASB Exposure Draft is available for comment until October 21, 2015.