|
|
“Fundamentally, all professional accountants have an ethical responsibility to respond in these situations and not turn a blind eye to them,” commented IESBA Chairman Dr. Stavros Thomadakis. “Importantly, their response can play a role in ensuring that serious instances of non-compliance with laws and regulations are appropriately addressed, or in deterring them. The board intends the proposed framework to guide professional accountants’ response in these situations, ensuring their actions serve the public interest while recognizing the essential role of management and those charged with governance in addressing the issue.”
Among other matters, the proposed standard serves to better equip auditors and other professional accountants to address such issues by providing a pathway to disclosure to an appropriate authority in appropriate circumstances without the duty of confidentiality under the Code of Ethics for Professional Accountants™ acting as a barrier. It also places renewed emphasis on the importance of senior-level PAIBs promoting a culture of compliance with laws and regulations within their organizations.
“The board believes that the proposed framework represents a holistic, proportionate, and balanced model for addressing what can often be complex situations,” noted IESBA Technical Director Ken Siong. “The board also believes that the proposed standard’s enhanced guidance will support and complement legal and regulatory frameworks in jurisdictions that already mandate reporting by professional accountants of identified or suspected non-compliance with laws and regulations to appropriate authorities.”