IESBA Proposes Changes to Code of Ethics to Address Illegal Acts

The International Ethics Standards Board for Accountants (IESBA) released
for public exposure new requirements that address a professional
accountant's responsibilities regarding the disclosure of suspected illegal
acts committed by a client or employer. The proposals describe the
circumstances in which a professional accountant is required or expected to
breach confidentiality, one of the five fundamental principles in the *Code
of Ethics for Professional Accountants* (the Code), and disclose the act to
an appropriate authority.

The Exposure Draft (ED), *Responding to a Suspected Illegal Act,* proposes
adding two new sections addressing illegal acts to the Code—one each for
professional accountants in public practice and professional accountants in
business—and several revisions to other related sections*. *The* *new
sections clearly delineate the expected course of action for a professional
accountant to take if those charged with governance do not respond to the
issue appropriately.

"Breaching confidentiality is not something to be taken lightly," said
Jörgen Holmquist, chair of the IESBA. "However, when the consequences of
non-disclosure are potentially harmful to individuals or society,
confidentiality must be overridden. Accountants have an important role to
play in protecting the public interest and enabling authorities to take
appropriate action."

*How to Comment*
*

*The IESBA invites all stakeholders to comment on its proposals in the
ED,*Responding to a Suspected Illegal Act.
*To submit a comment, visit the IESBA website at
www.ethicsboard.org<http://www.ifac.org/ethics>.
Comments on the ED are requested by *December 15, 2012.

About the IESBA**

*The International Ethics Standards Board for
Accountants<http://www.ifac.org/ethics> (IESBA)
is an independent standard-setting board that develops and issues, in the
public interest, high-quality ethical standards and other pronouncements
for professional accountants worldwide. Through its activities, the IESBA
develops the *Code of Ethics for Professional Accountants*, which
establishes ethical requirements for professional accountants. The
structures and processes that support the operations of the IESBA are
facilitated by IFAC. Please visit www.ethicsboard.org for more information.

*About IFAC*
*
*IFAC <http://www.ifac.org/> is the global organization for the accountancy
profession, dedicated to serving the public interest by strengthening the
profession and contributing to the development of strong international
economies. It is comprised of 167 members and associates in 127 countries
and jurisdictions, representing approximately 2.5 million accountants in
public practice, education, government service, industry, and commerce.