The International Ethics Standards Board for Accountants (IESBA) today released for public exposure new requirements that address a professional accountant’s responsibilities regarding the disclosure of suspected illegal acts committed by a client or employer. The proposals describe the circumstances in which a professional accountant is required or expected to breach confidentiality, one of the five fundamental principles in the Code of Ethics for Professional Accountants (the Code), and disclose the act to an appropriate authority.
The Exposure Draft (ED), Responding to a Suspected Illegal Act, proposes adding two new sections addressing illegal acts to the Code—one each for professional accountants in public practice and professional accountants in business—and several revisions to other related sections. The new sections clearly delineate the expected course of action for a professional accountant to take if those charged with governance do not respond to the issue appropriately.
“Breaching confidentiality is not something to be taken lightly,” said Jörgen Holmquist, chair of the IESBA. “However, when the consequences of non-disclosure are potentially harmful to individuals or society, confidentiality must be overridden. Accountants have an important role to play in protecting the public interest and enabling authorities to take appropriate action.”
How to Comment
The IESBA invites all stakeholders to comment on its proposals in the ED, Responding to a Suspected Illegal Act. To submit a comment, visit the IESBA website at www.ethicsboard.org. Comments on the ED are requested by December 15, 2012.
About the IESBA
The International Ethics Standards Board for Accountants (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
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. It is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.