NOCLAR – accountants’ reporting of offences

Some while ago, I took an interest in the professional obligation that accountants decided to impose on themselves to respond to and as necessary refer observed legal misconduct – NOCLAR “non-compliance with laws and regulations” – to the police or other authorities.  This obligation commenced through changes made to the accountant’s ethics code, APES 110. Code of Ethics – Home (

Following the fanfare surrounding the introduction of NOCLAR in 2018, I have not heard of its impact – whether it is serving the purpose of exposing miscreants? Or shaping behaviour?  Given that the duty lies with accountants, who are everywhere – in firms large and small, large business and small, in government, and in audit, and consulting, we might expect to hear of some measurable impact of NOCLAR, or instances of it working?  

Currently, a comparable reporting obligation is said to arise in relation to current changes to tax law, and what is said to be a proposed legal requirement for accountants to “dob in peers” whom they believe have committed breaches of the proposed Code of Professional Conduct.[1]


APES 110 provides that if an accountant becomes aware of NOCLAR with their client or employer, they are required to respond, which may extend to disclosing the matter to an appropriate authority even where there is no other legal or regulatory requirement to do so. Specific examples of “laws and regulations” which NOCLAR addresses include those that deal with fraud, tax, corruption and bribery, money laundering and breaches of confidentiality.  Wage theft would be another.

It sits alongside and supplements the guidance contained within the revised Auditing Standard ASA 250 Consideration of Laws and Regulations in an Audit of a Financial Report aimed at assisting auditors in identifying material misstatements in a financial report. 

An objective of NOCLAR is said to be to strengthen the reputation of the accounting profession in serving the public interest.

I had reservations about what the accountants were doing, even though with noble intent, including as to the drafting, and whether they had taken legal advice. The wording of the obligation, in accountants’ language, is vague, perhaps deliberately so.

For Member accountants in business NOCLAR “comprises acts of omission or commission, intentional or unintentional, which are contrary to the prevailing laws or regulations committed by the following parties: (a) The Member’s employing organisation; (b) Those Charged with Governance of the employing organisation; (c) Management of the employing organisation; or (d) Other individuals working for or under the direction of the employing organisation. This term is described in paragraph 260.5 A1 of APES 110.

For accountant Members in public practice, the relevant parties are: “(a) A client; (b) Those Charged with Governance of a client; (c) Management of a client; or (d) Other individuals working for or under the direction of a client”. See paragraph 360.5 A1 of APES 110.

Also, the history of the law of misprision raised some concerns.  The old common law offence of misprision of felony – unlawfully concealing or not reporting the commission of a felony – is now a statutory offence only in NSW, under section 316 of the Crimes Act 1900.  It creates an offence where a person knows that a serious indictable offence has been committed, has information that might be of material assistance in securing the apprehension or the prosecution of the offender, but fails without reasonable excuse to bring that information to the attention of the police or other appropriate authority.  The offence has been criticised, exists nowhere else, but the offence remains. [2]    The extent to which crime is reported anyway is relevant.  

Relevance and Impact?

Looking at it positively, NOCLAR should usefully have impact in relation to SME clients’ tax compliance, about which there is much concern as to unpaid business tax debt.   The 2017-2018 decisions in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 (“Blue Impression”) seemed to cause alarm in some quarters, where[3] an accounting firm was held liable as an accessory for its involvement in contraventions of the Fair Work Act by the business to which it provided payroll services – a finding that the firm was “engaged in a contrivance, a deliberate shutting of the eyes or calculated ignorance”: Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 (28 April 2017) (  

NOCLAR should apply to other issues of regulatory compliance, for example health and safety, misrepresentations, product safety.

It has come up in the current PJC inquiry into ethics and professional accountability [4] in the context of the accountants’ ethics code, APES 110.

It also ties in with whistleblowing laws and the ATO’s and the regulators’ encouragement of “tip offs”.[5]

And as explained initially, it ties in with new proposed laws concerning “egregious tax practitioners”, those enabling or instigating “black economy participation by their clients” through tax fraud and money laundering and under-reporting of business income and over-claiming of business deductions.  See Explanatory Memorandum to the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023.

The three professional accounting bodies – CAANZ, CPA and IPA – and the regulatory authorities (ASIC, TPB, ATO and others) are responsible for monitoring and enforcing compliance of professional accountants, including NOCLAR. Although it sets the standards, including NOCLAR, the APESB’s mandate does not include monitoring and enforcement.  

Putting aside NOCLAR, one would think that professional advice or involvement in a client’s or firm’s unlawful conduct would be proscribed by other rules, and be the exception.  Though in my field, many a voidable transfer of property to defeat creditors, or extended insolvent trading, could only have been effected with professional assistance and advice.   And one of the PJC inquiries might find otherwise.


While NOCLAR represents a worthy aim, accountants’ compliance with the obligation was always going to be difficult to monitor and enforce, so much so that its value might be questioned.  Some monitoring or surveying of its impact would be useful.  At the moment, non-compliance is most likely to come to light when, following investigation of some tax scheme, or industry collusion or employee exploitation, or breach of confidential government information, or insolvent trading, the response of the accounting advisers, or internal accountants, is then closely examined.


[1] Concern over compelling accountants to dob in peers – Financial Newswire

[2] “Serious offence” is one punishable by imprisonment for five years or more. The NSW Law Reform Commission recommended that the offence be abolished. It [3.18] examined strong arguments for reforming s 316 including philosophical objections to the policy rationale of the section and the criticism that people can have legitimate reasons to not report serious offences. In particular, the propriety of the reporting obligation imposed on the family and close friends of offenders was questioned.

[3] Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 (28 April 2017) ( under the Fair Work Act 2009.

[4] Parliamentary Joint Committee on Corporations and Financial Services – Ethics and Professional Accountability: Structural Challenges in the Audit, Assurance and Consultancy Industry.

[5] Your privacy if you make a tip-off | Australian Taxation Office (

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