Responding to NOCLAR in Professional Practice
Learn about the framework and objectives for all CAs to comply with integrity and professional behavior standards, including the responsibilities and actions needed to address non-compliance situations effectively. Explore the roles of Senior CAIBs and other CAIBs in preventing and responding to NOCLAR incidents, emphasizing the importance of ethical decision-making and disclosure to appropriate authorities.
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Presentation Transcript
Responding to NOCLAR INDUSTRY PERSPECTIVE Webinar by ICAP June 10, 2021
Framework Objectives All CAs To comply with the fundamental principles of integrity and professional behavior By alerting management or those charged with governance it enables them to: Rectify, remediate or mitigate consequences of the non-compliance Deter the commission of the non-compliance if not yet occurred Take such further action as appropriate in the public interest, including: Disclosing the matter to an appropriate authority even if not required by law Resigning from the employment/engagement relationship
Senior CAIB Directors, officers or senior employees with ability to make decisions about acquisition, deployment and control of entity s resources Senior CAIB Overarching expectations: Set right tone at the top Establish appropriate framework within entity to prevent NOCLAR Other CAIB
Senior CAIBs - Requirements Fulfill professional responsibilities Understand and comply with laws and regulations Raise the matter with superior/TCWG Rectify/remediate/mitigate consequences Seek to deter commission of NOCLAR Determine whether to alert external auditor Determine if further action needed in public interest, in light or response of superior/TCWG Nature and extent of further action will depend on various factors
Senior CAIBs Determination of Further Action Must apply third party test Courses of further action include: Inform parent entity if applicable Disclose NOCLAR to appropriate authority (even if not required by law or regulation) Resign from employment relationship
Other CAIB Fulfill professional responsibilities Understand and comply with laws and regulations Consult on confidential basis with others in organization or professional body Raise the matter with superior Inform next higher level of authority within organization Determine if further action needed in public interest, in light or response of superior/TCWG Disclose NOCLAR to appropriate authority
Documentation In relation to reporting of NOCLAR, CAs are encouraged to document following matters; The matter The result of discussions with superiors, management and those charged with governance How the accountant s superiors, management and those charged with governance responded to the matter The course of action the accountant considered, the judgements made and decisions that were taken How responsibility fulfilled related to further action if any.
Challenges in Responding to NOCLAR Same Persons acting as Management and Board of Directors Availability of Independent Whistle Blowing Function Arranging Professional Opinion from Regulatory or Professional Bodies Availability of Legal Counsel Exercising Professional Judgement in determining substantial and non- consequentiual non compliance Threat of Termination and to Physical Safety Support from Regulators and Professional Bodies on reporting NOCLAR
