In a move to improve good governance in accounting, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) will be adopting the ‘Responding to Non-Compliance with Laws and Regulations’ (NOCLAR) standard next year.
At an awareness programme on NOCLAR this week, CA Sri Lanka President Lasantha Wickremasinghe said that the new standard will be adopted on July 15, 2017, the same day that the International Ethics Standard Board for Accountants (IESBA) will be implementing the standard internationally.
NOCLAR is seen as an important initiative aimed at safeguarding the accounting profession, and enhancing the reputation and respect of professional accountants across the world.
NOCLAR is an international ethics standard for auditors and other professional accountants (PAs), and sets out a first-of-its-kind framework to guide PAs in what actions to take in the public interest when they become aware of a potential illegal act conducted by a client or an employer.
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.
The standard applies to all categories of PAs 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. Wickremasinghe said that NOCLAR stimulates greater accountability among organizations, help protect stakeholders and the general public from substantial harm resulting from violation of laws and regulations and strengthen the reputation of the profession. He also added that this will position the accountancy profession to play a greater role addressing financial fraud, money laundering and corruption.
Wickremasinghe also highlighted that this initiative is also in line with the good governance policy of Sri Lanka.
CA Sri Lanka Professional Conduct (Ethics) Committee Chairman and IESBA Member Reyaz Mihular said that PAs have been permitted to set aside the duty of confidentiality under the Code of Ethics for Professional Accountants in order to disclose NOCLAR to appropriate public authorities in certain circumstances. The CA Sri Lanka Professional Conduct (Ethics) Committee will launch a series of awareness programmes, in collaboration with IESBA, targeting PAs including practicing members, Board of Directors including audit committees and the general public.