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The proposed pronouncement in this Exposure Draft (ED) is based on the final pronouncement of Responding to Non-Compliance with Laws and Regulations (NOCLAR) issued by International Ethics Standards Board for Accountants (IESBA).
NOCLAR comprises acts of omission or commission, intentional or unintentional, committed by a client or by those charged with governance, by management or by other individuals working for or under the direction of a client, which are contrary to the prevailing laws or regulations.
The proposed NOCLAR pronouncement would set out a new framework to guide the auditors, other professional accountants in public practice, and professional accountants in business (PAIBs), given their responsibility to act in the public interest, in assessing the implications of the matters and the possible courses of actions, when they become aware of NOCLAR, committed by a client or employer. The proposed pronouncement would also place emphasis on the role of senior PAIBs in promoting a culture of compliance with laws and regulations and prevention of non-compliance within their organizations.
Please refer to the Explanatory Memorandum of the ED for a summary of the key elements of the proposed pronouncement.
If adopted, EP 100 would contain new sections 225 and 360 addressing the responsibilities of professional accountants when they become aware of NOCLAR committed by a client or employer. Consequential and conforming changes would be made to sections 100, 140, 150, 210 and 270 of EP 100.
Cognisant of the possible concerns of adopting the proposed pronouncement in Singapore, a frequently asked questions section is included in the ED to illustrate certain aspects of the proposed pronouncement and to assist professional accountants in implementing the requirements in the pronouncement.
The ISCA Ethics Committee (EC) takes a leading role in the development of ethics standards in Singapore to enhance public trust and confidence in the accounting profession in Singapore. As such, the ISCA EC would like to seek views on the proposed pronouncement in the ED.
Written comments to the ED are requested to be submitted technical@isca.org.sg by 24 May 2019.
Click here to access the ISCA ED