responding to suspected illegal acts
Download
Skip this Video
Download Presentation
Responding to Suspected Illegal Acts

Loading in 2 Seconds...

play fullscreen
1 / 10

Responding to Suspected Illegal Acts - PowerPoint PPT Presentation


  • 100 Views
  • Uploaded on

Responding to Suspected Illegal Acts. CAG Brussels March 2012. Responding to Suspected Illegal Acts. Recap of October 2011 IESBA Meeting. Task Force Proposal in October IESBA Meeting for all categories of professional accountant: Report internally and escalate if response not appropriate

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Responding to Suspected Illegal Acts' - knut


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
responding to suspected illegal acts1
Responding to Suspected Illegal ActsRecap of October 2011 IESBA Meeting
  • Task Force Proposal in October IESBA Meeting for all categories of professional accountant:
    • Report internally and escalate if response not appropriate
    • Requirement to disclose to appropriate authority if entity has not appropriately addressed the matter and, in the judgment of the professional accountant it is in the public interest to disclose to an authority
    • Matters reportable to an appropriate authority are those that (i) affect financial reporting or (ii) are within the expertise of the professional accountant
    • In determining whether disclosure is in the public interest the professional accountant shall consider “whether a reasonable and informed third party, weighing all the specific facts and circumstances, would be likely to conclude that the suspected illegal act is of such consequence that disclosure would be in the public interest”
responding to suspected illegal acts2
Responding to Suspected Illegal ActsRecap of October 2011 IESBA Meeting
  • General support expressed for the approach adopted
  • However, the Board unable to reach a consensus on “requirement” versus “right” to disclose
  • Task Force was asked to develop wording to convey a “robust right”
responding to suspected illegal acts3
Responding to Suspected Illegal ActsPresented at IESBA February Meeting
  • Requirement with an exemption for extraordinary circumstances (Agenda Paper D-2)
  • Robust right (Agenda Paper D-3)
  • Majority Task Force position (Agenda Paper D-4):
    • Auditor (also performing NAS)– Requirement to disclose to an appropriate authority with exemption for extraordinary circumstances
    • Professional Accountant performing non-audit services to non-audit client – Robust right to disclose to an appropriate authority
    • Professional Accountant in Business – Robust right to disclose to an appropriate authority
responding to suspected illegal acts4
Responding to Suspected Illegal ActsMajority Position Agreed in February Board Meeting
  • Auditor or otherprofessionalaccountantperformingnon-auditservicestoanaudit client:
    • Escalate in the organization
    • Ifnotappropriatelyaddressed and in the public interest, requirementtodiscloseto a competent authority
    • In exceptional circumstances not required to disclose “if a reasonable and informed third party would conclude that the probable threats to the safety of the professional accountant or other individuals are sufficiently severe to outweigh the benefits of disclosure”.
responding to suspected illegal acts5
Responding to Suspected Illegal ActsMajority Position Agreed in February Board Meeting
  • Professional accountantperformingnon-auditservicesto a non-audit client:
    • Escalate in the organization or discloseto the external auditor ifunabletoescalate
    • Ifnotappropriatelyaddressed and in the public interest, requirementtodiscloseto the external auditor
    • Righttodisclosetocompetent authority, ifrelatingtosubjectmatterof the engagement
    • Right isexpectedtobeexercised
    • In exceptional circumstances not required to disclose “if a reasonable and informed third party would conclude that the probable threats to the safety of the professional accountant or other individuals are sufficiently severe to outweigh the benefits of disclosure”
responding to suspected illegal acts6
Responding to Suspected Illegal ActsMajority Position Agreed in February Board Meeting
  • Professional accountant in business:
    • Escalate in the organization or useestablishedinternalethicsmechanisms (e.g. hot-line) or discloseto the external auditor
    • Ifnotappropriatelyaddressed and in the public interest, requirementtodiscloseto the external auditor
    • Ifcontinuestobenotappropriatelyaddressed the professionalaccountanthas a righttodisclosetocompetent authority if the matterrelatesto;
      • Financial reporting
      • Fallswithin expertise of the professionalaccountant
    • Right is expected to be exercised
    • In exceptional circumstances not required to disclose “if a reasonable and informed third party would conclude that the probable threats to the safety of the professional accountant or other individuals are sufficiently severe to outweigh the benefits of disclosure”
responding to suspected illegal acts7
Responding to Suspected Illegal ActsMajority Position Agreed in February Board Meeting
  • Otherchangesagreed:
    • Additionalguidance on determiningwhatis in the public interest:
      • Consider “the substanceof the matter, the numberof people thatwillbepotentiallyaffected…and the extenttowhichsuch people couldbepotentiallyaffected”
    • Additionalguidance on “competent authority”:
      • A competent authority is “onewithresponsibilityforsuch a matter. In manyinstances, that authority willhave the abilityto investigate and take correctiveactiontosafeguard the public interest”
responding to suspected illegal acts8
Responding to Suspected Illegal ActsProposed changes to existing sections of Code
  • Disclosure to external auditor is not a breach of confidentiality (140.4)
  • Responding to unethical behavior (section 210):
    • Use safeguards to reduce to acceptable level or resign
  • Reference to ethics policies and whistle-blowing procedures (300.5)
  • Inclusion of example of behavior that impairs integrity (300.6)
  • Responsibility to discuss unethical behavior within organization and escalate (300.15)
ad