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 organisations. 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.
NOCLAR Public Statements
- SAICA sheds light on the new international Non-compliance with Laws and Regulations (NOCLAR) requirements
Johannesburg, 12 June 2017 – In line with the changes in 2016 to the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), the South African Institute of Chartered Accountants Code of Professional Conduct (SAICA Code) has been updated to include new, first of its kind, ethics requirements and guidance to assist members and associates in dealing with non-compliance with laws and regulations.
- Notice to complete NOCLAR declaration
Johannesburg, 12 January 2018 – Section 225 and section 360 of the SAICA Code of Professional Conduct (the SAICA Code) set out the responsibilities of SAICA members and associates (in public practice and in business, respectively) in responding to non-compliance or suspected non-compliance with laws and regulations (NOCLAR or suspected NOCLAR). These sections are effective as of 15 July 2017. The NOCLAR provisions establish a comprehensive response framework that guides SAICA members and associates in terms of the factors to consider and the steps to be taken when they become aware of NOCLAR or suspected NOCLAR.