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NOCLAR – Preliminary Update on ED Responses
Caroline GardnerNOCLAR Task Force Chair
IESBA CAG MeetingNew YorkSeptember 14, 2015
Overview of Responses as of September 8
Many late submissions still to come….
Overview of Responses
Generally broad support for response framework across stakeholder groups
Some split views on aspects of the proposals within the following stakeholder categories:Regulators and public authoritiesIFAC member bodiesOther professional organizationsA few respondents not supportive of IESBA addressing the topicAddressingPAs’responsibilitiesregarding NOCLAR should be left tolaworregulationThe Code’s conceptual framework sufficient; proposals overly complex and prescriptive
Overview of Responses
Broad support for key aspects of the proposals:Overall objectivesAlignment of scope with ISA 250Differential approach among the four categories of PAProposed courses of action and factors to consider in determining need for and nature and extent of further actionThird party test re further action to meet objectivesDocumentation
Overview of Responses
Recurring concerns among some, e.g.:No clear definition or guidance on meaning of “public interest” in objectivesEntry threshold too low (“other than clearlyinconsequential”)Potential for increased public expectations gapAdverse impact on trust relationship between PAs in public practice and clientsPAs being placed at competitive disadvantage vs non-PAsForensic-type/insolvency engagements scoped inHigh risk of retaliation for PAIBs
Selected Key Concerns
A “de facto” requirement to disclose to an appropriateauthority?Too much subjectivityin factors to consider (e.g.“substantial harm”)Lack of clear test will discourage disclosure; PAs erring on side of cautionExtension ofauditor’s work effort anddocumentation beyond ISAsImplicationsfor cross-border engagements adequately addressed?“Passing the buck” to auditors re non-auditors communicating to auditors?Ethical for PA to accept bounty by disclosing in compliance with proposals?
Selected Key Concerns
Next Steps





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