Request for comments on adoption of changes in code of ethics relating to sections 225 & 360 ‘Responding to Non Compliance with Laws and Regulations’

The Institute’s members are required to comply with ethical requirements contained in the Institute’s Code of Ethics for Chartered Accountants (Institute Code), last revised in 2015 and aligned with the Code of Ethics for Professional Accountants issued by International Ethics Standards Board for Accountants (IESBA Code), as of July 2014.

The Auditing Standards Committee (AuSC) of the Institute is currently considering the IESBA Code changes brought in after July 2014, in relation to the Institute’s existing Code within the context of Chartered Accountant Ordinance, 1961 and the public interest.

Responding to Non Compliance with Laws and Regulations (NOCLAR)

The Institute, with the objectives to inform members of the significant developments in IESBA Code and seek their comments thereon; would like to apprise of the IESBA International Ethics Standard on Responding to NOCLAR.

The standard applies to all professional accountants, including auditors, other professional accountants in public practice, and professional accountants in organizations, including those in businesses, government, education, and the not-for-profit sector. It addresses breaches of laws and regulations that deal with matters such as fraud, corruption and bribery, money laundering, tax payments, financial products and services, environmental protection, and public health and safety. It also includes a clear pathway to disclosure of NOCLAR to appropriate public authorities in certain circumstances.

NOCLAR standard is included in the 2016 edition of the Handbook of the IESBA Code of Ethics (section 225 and section 360). As mentioned above, prior to reaching on a conclusion as to adoption of NOCLAR standard in Institute’s Code, the Institute would like to obtain members’ comments and concerns (if any) on this standard. Consequential and conforming changes have also been made to sections 100, 140, 150, 210, and 270 of the IESBA Code.

The complete text of NOCLAR standard along with additional supportive material can be accessed at the following link:

Conforming changes in International Standards on Auditing (ISAs)

Further, in October 2016, the International Auditing and Assurance Standards Board (IAASB) approved the revisions to ISA 250 and related conforming amendments to other IAASB International Standards. The revisions comprise of limited amendments to ISA 250 (Revised), and other IAASB International Standards, in order to address actual or perceived inconsistencies of the approach to identifying and dealing with instances of identified or suspected NOCLAR. The changes are effective for audits of financial statements for periods beginning on or after December 15, 2017.

You are requested to send your views on IESBA NOCLAR standard, if any, to the Directorate of Technical Services at latest by July 31, 2017.

Circular 9: Request for comments on adoption of changes in code of ethics relating to sections 225 & 360  ‘Responding to Non Compliance with Laws and Regulations’