IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria. The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Ken Siong, Technical Director, International Ethics Standards Board for Accountants.

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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