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

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”

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

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

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

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

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

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

Any other comments?