Non-Compliance with Laws and Regulations (NOCLAR)

Background and resources

SAICA would like to inform members of the release of the NOCLAR standard by IESBA with an implementation date of 15 July 2017. This standard sets out a framework to guide auditors and other professional accountants in what actions to take in the public interest when they become aware of a potential illegal act, known as non-compliance with laws and regulations, or NOCLAR, committed by a client or employer.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.

The new standard provides a clear pathway for auditors and other professional accountants to disclose potential non-compliance situations to appropriate public authorities in certain situations without being constrained by the ethical duty of confidentiality. It also places renewed emphasis on the role of senior-level accountants in business in promoting a culture of compliance with laws and regulations and prevention of non-compliance within their organizations. As SAICA’s Code of Professional Conduct is in line with the IESBA Code, the SAICA Ethics Committee will be discussing possible amendments to the SAICA Code of Professional Conduct to align the SAICA Code with the IESBA Code.