The board has released for re-exposure an enhanced standard, Responding to Non-Compliance with Laws and Regulations, following stakeholder consultations last year which included global roundtables in Hong Kong, Brussels, and Washington, DC.

The proposed standard sets out a new framework to guide auditors, other professional accountants in public practice, and professional accountants in business when they encounter situations where they may need to highlight potential wrongdoing.

Dr Stavros Thomadakis, IESBA chairman, said: ‘Fundamentally, all professional accountants have an ethical responsibility to respond in these situations and not turn a blind eye to them. Importantly, their response can play a role in ensuring that serious instances of non-compliance with laws and regulations are appropriately addressed, or in deterring them.

‘The board intends the proposed framework to guide professional accountants’ response in these situations, ensuring their actions serve the public interest while recognizing the essential role of management and those charged with governance in addressing the issue.’

A key issue covered by the proposed standard is providing a pathway to disclosure to an appropriate authority in appropriate circumstances without the duty of confidentiality under the Code of Ethics for Professional Accountants acting as a barrier.

IESBA says it places renewed emphasis on the importance of senior-level accounts in business promoting a culture of compliance with laws and regulations within their organisations.

Ken Siong, IESBA technical director, said: ‘The board also believes that the proposed standard’s enhanced guidance will support and complement legal and regulatory frameworks in jurisdictions that already mandate reporting by professional accountants of identified or suspected non-compliance with laws and regulations to appropriate authorities.’

The exposure draft is open for comment until 4 September 2015 and more details are here