Karachi: The Southern Regional Committee of the Institute of Chartered Accountants of Pakistan (ICAP) organized an awareness session on new ethics requirement of responding to Non-Compliance with Laws and Regulations (NOCLAR) for its members.
Seminar was held at ICAP house and largely attended by practicing and non-practicing members. Key Note speaker was Mr. Haroon Tabraze, FCA, member of the Auditing Standards & Ethic Committee of ICAP who gave comprehensive presentation on NOCLAR pronouncements introduced in the revised Code of Ethics for Professional Accountants issued by International Ethics Standards Board (IESBA) of IFAC.
He explained the role and responsibilities of Professional Accountants (practicing members and members in business) what actions to take in the public interest when they become aware of a potential illegal act committed by a client or employer. Further through NOCLAR, Professional Accountants have been permitted to set aside the duty of confidentiality in order to disclose NOCLAR to the appropriate public authorities where there is a strong public interest reason.
The presentation was followed by panel discussion. Shariq Ali Zaidi, FCA, member of the Auditing Standards & Ethic Committee of ICAP was the moderator. Other panelists were Syed M. Shabbar Zaidi, FCA, Past President ICAP, and Amar Naseer, FCA, Managing Partner Amar Naseer Law Associates and Council Members Khalil Ullah Shaikh, FCA and Hina Usmani, FCA.
Panelist effectively discussed the practical implications which may arise due to NOCLAR adoption in Pakistan considering our local environment and legal requirements. It is already implied ethical responsibility of accountants to report NOCLAR. The only difference is that accountants are now required to document it, Shabbar Zaidi emphasized.
Professional Accountants in business would not be required to immediately report every noncompliance to regulators. The magnitude of the non-compliance must be tested before deciding whether the matter should be escalated to higher authorities. There is usually internal whistle blowing policy implemented in the organizations which must be considered in deciding further course of actions, Khalil Ullah Shaikh explained.
Hina Usmani clarified that the NOCLAR may affect the Small and Medium Practices because they are in development stages and would not like to report the matter of client to regulators due to commercial interest in the client. However, reporting the non-compliance to board of directors is quite usual in case of small businesses.
Amar Naseer discussed that currently there are certain laws which require a person to report non-compliances of such laws with public authorities but these are not applied practically. Further protection in laws is not practically provided to whistle blowers.
The panelist discussion was followed by the questions and answer session from the audience.
Farrukh Rehman, session Chairman concluded that NOCLAR through revision of ISA 250 and its conforming amendments in other ISAs, NOCLAR has been effective on auditors. Further ICAP’s Council will consider the adoption of NOCLAR after considering feedback received from awareness sessions.
The session was ended with the distribution of momentous to the speaker and panelists.
Published in Daily Times, April 5th 2018.