The document outlines the IESBA's NOCALR standard, effective from July 15, 2017, which provides a framework for professional accountants to act in the public interest when faced with non-compliance or suspected non-compliance with laws and regulations. It emphasizes the importance of reporting to management and taking appropriate action, which may include disclosing to authorities or withdrawing from engagements. The NOCALR framework is designed to enhance accountability and protect the public interest within organizations.

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NOCLAR
Ken Siong, IESBA Technical Director
World Bank CFRR – IFAC
Regional SMP Forum, Vienna
31 May 2017

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At his best, man is the noblest of
all animals; separated from law
and justice he is the worst.
– Aristotle

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IESBA’s NOCLAR Standard
• Major contribution to public interest
– Coming into effect 15 July 2017
• Provides a framework to guide
professional accountants (PAs) in
deciding how best to act in the public
interest when they become aware of
NOCLAR or suspected NOCLAR

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Objectives – All PAs
NOCLAR Response Framework
• Comply with fundamental principles of
integrity and professional behavior
• Through alerting management/ TCWG,
seek to:
– Enable them rectify, remediate or mitigate
consequences of NOCLAR; or
– Deter commission of NOCLAR
• Take such further action as may be
appropriate in public interest
Deter-
rence
Miti-
gation
Reme-
diation

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Scope of Laws and Regulations Covered – All PAs
• Laws and regulations with direct effect on
material amounts/disclosures in the financial
statements
• Other laws and regulations that may be
fundamental to entity’s business and operations
• E.g. laws and regulations dealing with:
– Fraud, Bribery and Corruption │ Money Laundering │
Terrorist Financing │ Financial Products and
Services │ Taxation │ Data Protection │
Environmental Protection │ Public Health and Safety
NOCLAR Response Framework

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Who Does It Apply To & Framework Expectations?
Auditors
Non-
auditors
“Senior”
PAIBs
Other
PAIBs
NOCLAR Response Framework

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Auditors – Taking Action
• Establish what legal or regulatory obligations are
triggered, if any, and comply with them
• Raise the matter with management/TCWG and
assess their response
• Comply with professional standards
• Determine whether to take further action
– Courses of further action include disclosure to appropriate
authority and withdrawal from engagement and client
relationship
• Professional judgment essential
NOCLAR Response Framework

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Key Desired Outcomes
Protecting and promoting the public interest
Stimulating greater accountability within
organizations
Protecting and strengthening reputation
of the profession

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• IFAC member organizations
• Governments, legislators, regulators
• Those charged with governance
• National standard setters
• Firms
• Regional and international organizations
• Academic institutions
Other Players Have Crucial Role

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• Resources available on IESBA website
– Fact Sheet
– Basis for Conclusions
– Video Q&A series and FAQs
– PowerPoint slides
– Other implementation support tools and resources
Implementation Support

11. The Ethics Board
www.ethicsboard.org