ETHICS AND U

Arjun: Oh my
Lord, please save me! Please save me! I totally surrender to Thee!

Shrikrishna: (Smiling);
Arrey Arjun, what happened? What is your panic about?

Arjun: Last time
you mentioned something about NOCLAR and I asked you whether it was some
disease. It really made me uneasy.

Shrikrishna: You are
talking about disease. Today, the only disease the world over is Corona!

Arjun: I am not
afraid of Corona. It will come and go but NOCLAR will stay forever on our
heads. Or even if Corona comes to me, I will myself go. So, no worries!

Shrikrishna: Ha! Ha!
Ha!

Arjun: Since you
have mentioned about Corona, tell me, how long will it stay? Can it be a good
excuse for seeking extension of time for payment of taxes?

Shrikrishna: (laughs)
Wah, Arjun! You are constantly thinking of extension of deadlines only. When
are you going to improve?

Arjun: Anyway,
tell me something more about NOCLAR.

Shrikrishna: See, this
is basically connected with the fundamental principles of integrity and
professional behaviour.

Arjun: But
reporting on non-compliances is dangerous. Both the entity as well as the
‘auditor’ will get into trouble.

Shrikrishna: Why? If
an accountant or auditor takes cognisance of it and acts accordingly, then
there is no problem for him.

Arjun: Agreed.
But the same non-compliances could be there in earlier years, too. And the CA
may not have reported on it.

Shrikrishna: But
Arjun, you need to start somewhere. Better late than never.

Arjun: But the
company will be ruined.

Shrikrishna: No,
Arjun, don’t jump to conclusions. Actually, it is meant for the betterment of
the company. It can take timely steps to set things right. Non-compliances
cannot continue perpetually. Some defaults, if continued, can cause serious
damage. They may lead to huge losses and penal consequences.

Arjun: True. We
are required to report on ‘going concern’. The non-compliances will soon make
the company itself ‘go away’.

Shrikrishna: You said
it! It’s like your health. Early detection of disease increases the chances of
cure – including diseases like cancer. For that matter, even Corona.

Arjun: But tell
me, what exactly are we supposed to do if we come across such non-compliance?

Shrikrishna: Look, if
you give early signals to the management, the serious damage can be avoided.
This will enhance the reputation of your profession. Look at the positive
aspect, my dear.

Arjun: Yes, I
agree. But tell me, how to tackle the situation?

Shrikrishna: In a few
situations NOCLAR may not apply – like where the default is minor and
inconsequential, more like a simple traffic offence or personal misbehaviour of
an employee.

Arjun: Yes. But
should we always qualify our report?

Shrikrishna: Not
necessarily. First, remember that it is not your duty to seek or search for
non-compliances. It should be the ones which you come across in the course of
your work.

Arjun: Good.

Shrikrishna: Then you
need to understand the matter well. Discuss it with the management or you may
seek legal opinion. Discuss and then decide whether any further action is
required.

Arjun: But what
if the management does not listen?

Shrikrishna: That is
more likely. Then create the evidence that you have drawn their attention. If
it is serious, then decide whether to report it to the appropriate authority.
But for all this, keep your documents perfectly in order in terms of the
relevant standard of auditing.

Arjun: Okay.
Understood. So, we need to tackle it tactfully, with a cool-head. We need not
panic nor rush to take further steps.

Shrikrishna: And in an
extreme situation you may even withdraw from the assignment.

Arjun: That’s a
good piece of advice! Thank you for enlightening me as usual.

Om Shanti

This
dialogue is a continuation of the concept of NOCLAR