Evaluating the understanding and implementation of Non-compliance with Laws and Regulations

Purpose: Recent examples of corporate misconduct have increased the responsibility of entities and the accounting profession to regain public trust. Adherence to laws and regulations supports good corporate citizenship and public trust in ethical cultures. The International Ethics Standards Board for Accountants (IESBA) formulated a framework for responses to ‘Non-compliance with Laws and Regulations’ (NOCLAR) in 2016. The objective of this study is twofold: (1) to determine the level of perceived understanding of NOCLAR among those charged with its implementation, and (2) to evaluate whether the requirements of NOCLAR are appropriately implemented. Design/methodology/approach: An empirical study was performed by distributing a survey to all South African professional accountants with registered e-mail addresses with the South African Institute of Chartered Accountants (SAICA). Findings/results: The findings indicate: (1) a strong perceived understanding and awareness of NOCLAR, but (2) that all requirements of NOCLAR are not adhered to. This indicates that while professional accountants in South Africa are aware of NOCLAR provisions, there are obstacles to its implementation and that its full value is not obtained in the drive to strengthen public trust. Practical implications: Member bodies of the International Federation of Accountants (IFAC) will have to consider practical solutions to ensure deeper understanding of the requirements of NOCLAR, monitoring its implementation and addressing implementation challenges. Originality/value: Limited research is available on the practical implementation of NOCLAR, and the study contributes to the narrative by evaluating both the understanding and implementation of NOCLAR as part of the drive to strengthen public trust.