APES110 – Keep your eyes wide open

In May 2017, a new section was introduced to APES 110 Code of Ethics for Professional Accountants. Responding to Non-compliance with Laws and Regulations, “NOCLAR”. This was in response to concerns from regulatory and governance communities globally that suspected or identified NOCLAR issues were not being appropriately addressed in the public interest.

What is NOCLAR?

NOCLAR is any act committed by an organisation (or person within the organisation) which is contrary to prevailing laws or regulations.  Obvious examples are fraud, money laundering, bribery etc, but the broad definition of NOCLAR gives rise to a number of questions about “what’s in and what’s out” that are, as yet, largely untested.

When will compliance commence?

NOCLAR is effective 1 January 2018.

Whose idea was it?

The International Ethics Standards Board for Accountants (IESBA) birthed NOCLAR from a debate about what is reasonable to ask of professional accountants given their responsibility to act in the public interest with respect to the above concerns.

Sure, but what does this mean for me?

Members of CAANZ, CPA Australia and the Institute of Public Accountants practising in Australia must comply with APES 110.  NOCLAR is a significant change for professional accountants in business (PAIB) in that there will be a duty to address potential NOCLAR issues.  Doing nothing is no longer an option.  For a professional accountant in public practice (PA), NOCLAR does not substantially change the responsibilities customarily associated with their professional duties (though there are different requirements for PAs and PAIBs).

What should I do?

The basic principle of the Code with respect to NOCLAR is that professional accountants should not turn a blind eye.  In short – keep your eyes wide open.

APES 110 provides a detailed framework on how to address a real or suspected NOCLAR committed by a client or employer, some key steps as follows:

  • Obtain an understanding of the issue (nature, consequences etc.);
  • Apply your organisation’s protocols regarding raising NOCLAR issues (and if you don’t have these, the clock is ticking); and
  • Consider legal and regulatory framework i.e. whether to notify an authority.


Samuel McCombe

Samuel McCombe
Partner, Melbourne
T: +61 3 9038 3186
E: smccombe