Accountants who discover or suspect illegal acts have been placed under a new obligation to report them to the appropriate authorities.
In doing so, accountants will be absolved of the principle of confidentiality where illegal acts are suspected.
The obligation is contained in a new standard issued by the Accounting Professional and Ethical Standards Board (APESB) in a move intended to bring Australia into line with a broader international approach.
According to the APESB, the new standard requires accountants to consider their obligations if they uncover or suspect illegal acts such as fraud, corruption, bribery or money laundering during the course of their professional work.
Commenting on the new standard, APESB chair, Nicola Roxon said it was intended to encourage professional accountants to speak up when they discover laws and regulations are not being adhered.
Further, she said it identified the processes accountants should follow in raising their concerns.
Noting the impact on traditional accountant/client confidentiality, Roxon said it had been feared that, in the past, identifying potential illegal acts and raising the alarm did not always prevail over confidentiality and other obligations to a client or employer."
The new standard, Responding to Non-Compliance with Laws and Regulations (NOCLAR), will come into effect from 1 January, next year however the APESB is urging individual firms and accountants to adopt it earlier.
The new standard will be incorporated into the Australian Code APES 110 Code of Ethics for Professional Accountants (APES 110) which will also incorporate minor changes to the provision of non-assurance services.