Why Accountants Need to Worry About Whistleblower Protections
The upcoming Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 has the corporate and financial sectors on edge. The key objectives of the Bill are to enhance the protections for whistleblowers currently outlined in the Corporations Law and to impose obligations on public and large corporate entities to have a sound whistleblower policy.
If enacted, the Bill will levy new onuses on not just banking, financial and wealth professionals but also accountants, tax experts and BAS agents to protect the identity of whistleblowers. However, when it comes to accounting and tax professionals, there is more than one facet to the Bill, which is why it’s important for them to take note of their obligations and prepare their colleagues for the impending legislation.
The amendments to the Bill not only oblige accountants to disclose unlawful client conduct (the same as everyone else) but also names them as “eligible recipients” of whistleblower information.
Specifically, the Bill allows for protected disclosures to be received by tax accountants and auditors of regulated entities and superannuation entities. Accountants are very likely to be on the receiving end of disclosures regarding a client’s conduct and it’s very tempting to on-disclose that information to the client. However, if the Bill is enacted, this behaviour can actually lead to criminal liability for accountants and tax agents, which may even include imprisonment.
The Key Steps to Preparing for Legislation
Becoming familiar with the provisions of the Bill is obviously the first step to preparation. But firms also need to ensure that their professionals receive on-going training about their obligations and the protections that may be afforded by the forthcoming legislation.
In my experience in working with whistleblowers and organisations embroiled in scandal, there is nothing more important than setting and maintaining a positive ethical culture that encourages whistleblowers to speak up. Now is a good time for accounting and tax firms to consider their internal whistleblower policies and make changes, if necessary. Start by asking the following questions:
- Do you have a whistleblower policy in place that is well communicated and understood?
- Do you have processes in place to facilitate anonymous reporting?
- Do you have processes in place for protecting whistleblowers and responding adequately to disclosures?
Written policies and procedures go a long way in setting new responsibilities and encouraging compliance. But they’re ineffective if the organisation’s leaders do not adhere to them. It’s imperative that change begins at the top and leaders effectively communicate new policies as well as act upon them. An ethical and transparent leadership not only breeds a positive and open internal culture but also helps deter misconduct in the long-term.
At PKF Integrity, we’ve already commenced training both staff and clients on the amendments to the Bill and steps they can take to instil a positive whistleblower culture. We’re authoring content every week to distribute to our clients and colleagues as well as developing training materials and webinars, which we’ll be hosting in the next few weeks.