- Category: Banking & Finance
08 May 2014
- Written by Dr. Conchita L. Manabat
“A professional accountant shall maintain confidentiality unless there is a professional duty or right to disclose confidential information, when not prohibited by law, to comply with technical standards and ethics requirements.”
Code of Ethics for Professional Accountants
Like any other professions, the accountancy profession has its Code of Ethics as set by the International Ethics Standards Board for Accountants (IESBA). The IESBA (or Ethics Board) is an independent standard-setting board that continuously develops and issues high-quality ethical standards and other pronouncements for professional accountants worldwide.
In response to regulatory concerns that the current expectation of confidentiality under the IESBA Code of Ethics for Professional Accountants (the Code) is an impediment to whistle blowing or disclosure by accountants on non-compliance with laws and regulations (Noclar) or suspected Noclar, the Ethics Board initiated and launched a project on the issues. It culminated with the issuance of an exposure draft (ED) in August 2012. The concerns relate to how to balance professional accountants’ responsibility to act in the public interest against confidentiality, one of the five fundamental principles in the Code. Basic is what is reasonable to ask of auditors and other professional accountants within their public interest mandate.
The exposure draft elicited comments from the public. As part of the process of evolving and developing high-quality ethical standards, the IESBA is holding three global roundtables this year to further debate and consider all publics’ opinions in developing/enhancing the ethical standards to address the professional accountants’ responsibilities when confronted with Noclar by a client or employer. The first of such roundtables will be held in Hong Kong on May 20 to be followed by two others in Brussels, Belgium, on June 13 and in Washington, D.C., USA, on July 10.
Participants to the roundtables are senior-level personages from a broad range of national and international organizations representing various backgrounds and perspectives. The fora will provide the opportunity for an exchange of views in a dynamic manner.
The Asian Financial Executives Institutes will be represented by the author of this article in the Hong Kong roundtable discussion. The chief corporate regulator of the country, the chairman of the Securities and Exchange Commission, is also invited. Readers of this article are encouraged to provide their views, and the web site of IESBA provides more particulars about the Noclar.
Dr. Conchita L. Manabat is the president of Development Center for Finance and is a member of the Consultative Advisory Group for the International Ethics Standards Board for Accountants and the International Auditing and Assurance Standards Board representing the Asian Financial Executives Institutes. She is a past chairman of the International Association of Financial Executives Institutes, where she now serves as chairman of its Advisory Council.