The International Ethics Standards Board for Accountants is releasing a new standards book this week designed to elicit early detection of corporate wrongdoing and early correctional action. Accountants are frequently confounded as to what to do about corporate fraud as they also have a duty of confidentiality. There is an apparent need for the standards given the extent of corporate fraud in the U.S. and elsewhere.
In 2015, over 71 class action lawsuits were filed concerning improper accounting. The approximate dollar losses totaled $34.8 billion.
Among other things, the guide recommends that accounts should disclose to management any clear wrongdoings and the regulatory responsibilities of the company. It does not speak about revealing the information of legal violations to the Government or of whistleblowing, however.
Jeffrey Newman represents whistleblowers