Why didn’t someone do something? the obligation to whistleblow

There is a current focus on whistleblowing as being one means whereby unlawfulness can be controlled. But what can be a voluntary and sometimes difficult choice to whistleblow may in fact constitute a legal or professional obligation to do so.

Whether that be formally ‘whistleblowing’, the same purpose is achieved, the reporting of unlawful conduct.

This aspect and related issues have been covered in several articles on this site.

Here is a recap and an update, including as to how the regulators themselves are now to report to each other.

The crime of not reporting

It is a criminal offence in NSW not to report a serious crime to the police, this being a modern restatement of the old common law offence of not reporting a felony. It is found in s 316 Crimes Act 1900 (NSW), with a penalty of up to 5 years jail.[1]

In the current whistleblower context, examples where the obligation might arise would be where an employee in an enterprise becomes aware that the enterprise is engaging in tax fraud; or selling dangerous products; or that individuals within the enterprise are defrauding the business itself. Depending on the seriousness of the breaches, the employee may be obliged to report.

In another context, if a person within the organisation comes across child pornography[2] of a colleague or company officer, there would be an obligation to report.

No concession to journalists or accountants, and increasingly, priests

Section 316 gives some concessions to certain groups – lawyers, doctors, social workers and others, but no concessions are given to accountants or journalists.[3]

Doctors and teachers have separate and particular obligations to report, for example in relation to child abuse.

Protection of priests from the obligation to report offences is the subject of recent and controversial law change.[4]


At the professional level, there are in the order of 200,000 professional accountants in Australia,[5] with 70% reported to be engaged in business.

Each one has an obligation under their Code of Ethics for Professional Accountants to report serious breaches of the law by a client or their employer.

That Code was recently redrawn by APESB to allow a direct and enforceable means of ensuring compliance. But while APESB and others much promote the Code and its obligations, regulation and compliance is less mentioned, if at all.

From a whistleblower law perspective, although the Code of Ethics is not qualified by the personal consequence of reporting for the accountant, APESB itself has said that any significant risk of a lack of statutory whistleblower protection ‘may potentially be the deciding factor’ against accountants deciding to report offences. In that respect, there is no particular concession made to accountants under the new whistleblower laws.

As much as we can say is that, in theory at least, if there were substantial compliance by accountants with their reporting obligations, there would be a whole body of reporters in business and government monitoring legal compliance.

Insolvency accountants

Liquidators and bankruptcy trustees who are accountants, as most are, have particular statutory obligations to report, in the nature of whistleblowing, and also protections. While an insolvency does not imply wrongdoing, it has that potential, and the legal policy is that some level of investigation and reporting of breaches of the law is required. Liquidators and bankruptcy trustees have statutory and qualified privilege protection.

They also have their Code of Ethics reporting obligations. AFSA has issued guidance for trustees on those professional obligations which would likewise apply to liquidators.


Under the new 4th edition of the ARITA Code, commencing 1 January 2020, members can be required to report any ‘unethical and illegal behaviour’ of others either to ARITA itself or to any relevant regulator. The latter is limited to the behaviour of ‘a professional or advisor [who practises]’ in insolvency, restructuring or turnaround.

ARITA members can also be required to self-report.


Some will recall that the failure of an employee of a disgraced liquidator to report his unlawful conduct involved adverse professional consequences for the employee.[6]

ARITA, CPA, CAANZ and others

ARITA, CPA, CAANZ and other accounting bodies have their own professional obligations to report their reasonable suspicions of misconduct, under the industry notices under s 40-100 of the Schedules. They have some protection from liability in doing so.[7]

And, the regulators must report

The law is now progressing to the stage where the regulators themselves are obliged to report. Under the proposed reforms recommended by the Hayne Royal Commission,[8] ASIC and APRA would be required to report to each other, that is, the law proposes that APRA must notify ASIC of its reasonable belief that a material breach of a law administered by ASIC may have occurred, and vice versa.

In addition, APRA and ASIC must, as is practicable, ‘work in co-operation’ with each other.

This compares with but goes further than the obligation of ASIC and AFSA to cooperate with each other,[9] which however is limited to co-operation involving insolvency accountants who are both liquidators and trustees.


Broadly, the ultimate point of whistleblowing, both voluntary and under compulsion, is to avoid the common question asked of regulators and other gatekeepers after the event –

“why didn’t someone in charge say or do something?”

[1] A ‘serious indictable offence’.

[2] See s 91FB Crimes Act 1900 (NSW)

[3] Crimes Regulation s 4A

[4] Children Legislation Amendment Act 2019 (Vic); Criminal Code and Related Legislation Amendment (Child Abuse) Act 2019 ((Tas).

[5] https://corelist.com.au/news/statistic-on-accountants-in-australia/

[6] CAANZ Professional Conduct Tribunal – 19 February 2015

[7] Sections 40-105

[8] Proposed Financial Regulator Reform (No. 2) Bill 2019: Governance (FSRC Recommendations 6.9 and 6.11).

[9] Schedules s 10-5

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