Prescribed course of action accountants in case of non-compliance with laws and regulations.
From 1 January 2019, further rules have been laid down for accountants (also called NOCLAR) in respect of non-compliance with laws and regulations within their own organization and for clients. Accountants registered at the NBA in the Netherlands are obliged to comply with the new rules. But what exactly is it about? It concerns further rules with mandatory provisions. The NBA together with the NOCLAR comply with international developments, such as rules established in de Code of Ethics for Professional Accountants.
On the one hand, the regulations apply to accountants who are employed or connected to an organization and who occupy a senior position there. That senior position is defined as a position from which the accountant can take decisions relating to personnel, finance, processes and tangible or intangible resources or can exert significant influence thereon. In any case this would apply to the accountant who is CFO/CEO/Senior controller or has a similar function. In case of relevant non-compliance with law and regulations within his own organization, the accountant must take action. The accountants' guidelines prescribe the steps to be taken. It is important for organizations that employ accountants and the accountants themselves to be well aware of the consequences of this directive.
On the other hand, there may be an independent public accountant who undertakes an audit assignment for the organization. In case of relevant non-compliance or impending non-compliance with laws and regulations by the client, the accountant is required to discuss the non-compliance with the customer on the basis of the directive and to insist action be taken by management or the person tasked with governance. If no action is taken, the accountant must take measures in the general interest to prevent or reduce significant damage.
All in all, we think that the introduction of the NOCLAR from 1 January 2019 could have a significant impact for public accountants, but also for accountants in business, internal accountants and government accountants, on their relationship with customers/employers. Although this article is a summary and, for the interpretation of the steps to be taken, the regulations should be reviewed, we felt it important to inform you in general about this important development in the regulatory environment for accountants. Of course, we are happy to inform you further about this matter.
For more information contact:
Frank Groenewegen
Partner Baker Tilly
Groenewegen@bakertillycuracao.com
