Transcript Responding to Suspected Fraud and Illegal Acts • Rationale for project • Matters to be considered • Approach and timetable.

Responding to Suspected Fraud and Illegal Acts
• Rationale for project
• Matters to be considered
• Approach and timetable
Rationale
Confidentiality – Fundamental Principle
“to respect the confidentiality of information
acquired as a result of professional and
business relationships and, therefore, not
disclose any such information to third parties
without proper and specific authority, unless
there is a legal or professional right or duty
to disclose, nor use the information for the
personal advantage of the professional
accountant or third parties”
Rationale
Circumstances for Disclosure
• Disclosure permitted by law and is
authorized by client or employer
• Disclosure required by law
• Professional duty or right to disclose when
not prohibited by law
Matters to be considered
Legislative Environment
• Numerous examples of “whistleblowing”
legislation
• Project will recognize such legislation
• Might learn from content of such legislation
• Will not catalogue or cross-reference to legislation
Matters to be considered
Types of Fraud and Illegal Acts
• Mindful of ISA definitions
– Fraud - “intentional acts … involving the use of
deception to obtain an unjust or illegal advantage”
– Illegal acts – “acts of commission or commission by the
entity which are contrary to prevailing laws and
regulations”
• Initial presumption to restrict to suspected fraud
and illegal acts but will consider whether it should
be broader – for example, “unethical” or
“improper”
Matters to be considered
Threshold for Taking Action
• Level of suspicion
– Final determination ultimately a legal issue
– Likely will only have levels of suspicion
• Likely effect or magnitude
– Degree of public interest
– Minor breaches of regulation
Matters to be considered
Other
• Process for responding
– Discuss with superior
– Elevate matter if necessary, within the organization
– Consider need to report outside the organization
• Timing of disclosure
• Documentation
Approach
Timetable
• Approve project proposal Q2 2010
• Release consultation paper Q2 2011
• Release exposure draft Q4 2012
• Approve final standard Q1 2014
Any other comments?