360.1 Professional accountants are required to comply with the fundamental principles and apply the conceptual framework set out in Section 120 to identify, evaluate and address threats.
360.2 A self-interest or intimidation threat to compliance with the principles of integrity and professional behaviour is created when a professional accountant becomes aware of non-compliance or suspected non-compliance with laws and regulations.
360.3 A professional accountant might encounter or be made aware of non-compliance or suspected non-compliance in the course of providing a professional service to a client. This section guides the accountant in assessing the implications of the matter and the possible courses of action when responding to non-compliance or suspected non-compliance with:
(a) Laws and regulations generally recognised to have a direct effect on the determination of material amounts and disclosures in the client’s financial statements; and
(b) Other laws and regulations that do not have a direct effect on the determination of the amounts and disclosures in the employing organisation’s financial statements, but compliance with which might be fundamental to the operating aspects of the employing organisation’s business, to its ability to continue its business, or to avoid material penalties.
Objectives of the professional accountant in relation to non-compliance with laws and regulations
360.4 A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. When responding to non-compliance or suspected non-compliance, the objectives of the professional accountant are:
(a) To comply with the principles of integrity and professional behaviour;
(b) By alerting management or, where appropriate, those charged with governance of the employing organisation, to seek to:
(i) Enable them to rectify, remediate or mitigate the consequences of the identified or suspected non-compliance; or
(ii) Deter the non-compliance where it has not yet occurred; and
(c) To take such further action as appropriate in the public interest.
Requirements and application material