APES 110 Code of Ethics for Professional Accountants Part 2

Section 210 requires that members shall not allow a conflict of interest to compromise professional or business judgement. Members are to take reasonable steps to identify circumstances that might create a conflict of interest including identifying the relevant relationships and interests between parties, and activities and their implications to the parties. Members are required to remain alert to changes over time in the nature of the activities, interests and relationships that might create a conflict of interest whilst performing a professional activity. 

Further guidance

APES GN 40 Ethical Conflicts in the Workplace - Considerations for Members in Business (2020)

- In accordance with relevant reporting frameworks

- In a manner that is not intended to mislead or influence contractual or regulatory outcomes inappropriately

- Exercise professional judgement to:

• Represent the facts accurately and completely in all material respects
• Describe the true nature of business transactions and activities
• Classify and record information in a proper and timely manner

- Not omit information with the intention of misleading or influencing

- Be aware of the risk of bias

Further guidance:

APES GN 41 Management Representations (2020)

Section 240 requires that Members shall not manipulate information or use confidential information for personal gain or the financial gain of others. Having a financial interest, or knowing of a financial interest held by an immediate or close family member might create a self-interest threat to compliance with the principles of objectivity or confidentiality. 

Section 250 sets out requirements and application material in relation to the offering and accepting of Inducements when undertaking professional activities. Offering or accepting Inducements might create a self-interest, familiarity or intimidation threat to compliance with the principles of integrity, objectivity and professional behaviour. 

What is NOCLAR? 

NOCLAR is any act of omission or commission, intentional or unintentional, committed by the employer – including by management or by those charged with governance, or by others working for, or under the direction of the employer– which is contrary to prevailing laws or regulations.

Which laws and regulations?

Laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Other laws and regulations, even if they do not have a direct effect on financial statements, compliance with which may be fundamental to the entity’s operations, business, or where non-compliance may lead to material penalties.

Section 260 guides members in assessing the implications of, and the possible courses of action when responding to, or suspected NOCLAR.   NOCLAR does not impose an obligation to members to disclose a non-compliance, or suspected non-compliance to an authority, when there is no legal obligation to do so.

However, members must comply the principles of integrity and professional behaviour and with the relevant NOCLAR requirements and consider whether disclosure to an appropriate authority is an appropriate course of action in the circumstances. These vary depending on the role and specific characteristics of each case, but there are requirements for members to respond to NOCLAR and take action as appropriate in the public interest and not turn a blind eye. 

If a member decides that disclosure of NOCLAR to an appropriate authority is the right course of action in the circumstances, then such a disclosure will not be considered a breach of confidentiality.
Members are required to act in good faith and exercise caution.

Members cannot disclose NOCLAR to an appropriate authority if doing so would be contrary to law or regulation.