1. Matters to be considered Approach and timetable
Responding to Suspected Fraud and Illegal Acts
Rationale for project
Matters to be considered
Approach and timetable

2. Confidentiality – Fundamental Principle
Rationale
Confidentiality – Fundamental Principle
“to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the professional accountant or third parties”

3. Circumstances for Disclosure
Rationale
Circumstances for Disclosure
Disclosure permitted by law and is authorized by client or employer
Disclosure required by law
Professional duty or right to disclose when not prohibited by law 3

4. Matters to be considered
Legislative Environment
Numerous examples of “whistleblowing” legislation
Project will recognize such legislation
Might learn from content of such legislation
Will not catalogue or cross-reference to legislation 4

5. Matters to be considered
Types of Fraud and Illegal Acts
Mindful of ISA definitions
Fraud - “intentional acts … involving the use of deception to obtain an unjust or illegal advantage”
Illegal acts – “acts of commission or commission by the entity which are contrary to prevailing laws and regulations”
Initial presumption to restrict to suspected fraud and illegal acts but will consider whether it should be broader – for example, “unethical” or “improper” 5

6. Matters to be considered
Threshold for Taking Action
Level of suspicion
Final determination ultimately a legal issue
Likely will only have levels of suspicion
Likely effect or magnitude
Degree of public interest
Minor breaches of regulation 6

7. Matters to be considered
Other
Process for responding
Discuss with superior
Elevate matter if necessary, within the organization
Consider need to report outside the organization
Timing of disclosure
Documentation 7

8. Timetable Approach Approve project proposal Q2 2010
Release consultation paper Q2 2011
Release exposure draft Q4 2012
Approve final standard Q1 2014 8

9. Any other comments?