CPAs Working At Businesses – is there a NOCLAR in there (noncompliance with laws and regulations)?

NOCLAR is coming for CPAs – (NOCLAR = noncompliance with laws and regulations). NOCLARs apply to CPAs in business, and to CPAs in public practice, but with some differing provisions. This brief discussion pertains to the NOCLAR provisions that apply to CPAs in business (i.e., CPAs who work at businesses). When I was more active with CalCPA the members who worked at businesses were broadly referred to as members in the Business and Industry section. The AICPA Code of Professional Conduct contains NOCLAR provisions for members (CPAs) in business at ET 2.180.010, although under the facts and circumstances of the situation other ethics rules might well also apply. And, of course, issues of law and legal issues most likely will or may also be involved or at least relevant. ET 2.180.010 is effective June 30, 2023, but early implementation is allowed.

Previously I briefly wrote about NOCLARs here

Here is a new November 1, 2022, Journal of Accountancy NOCLAR article for CPAs in business

Briefly, quoting from the Journal of Accountancy article:

“The new interpretation contributes to the fight against noncompliance in areas such as financial fraud, money laundering, asset misappropriation, bribery, data protection, tax and pension liabilities, securities trading, public health and safety, and corruption. Additionally, the interpretation further emphasizes members’ roles in serving the public interest through the enhancement of integrity in global business operations.

The Code defines NOCLAR as any “acts of omission or commission, intentional or unintentional, that are contrary to the prevailing laws or regulations and are committed by the member’s employing organization or by those charged with governance, by management, or by other individuals working for or under the direction of the employing organization.”

Accountants in business at any level could be exposed to an instance of NOCLAR, and the responsibilities of senior professional accountants in business slightly differ from the responsibilities of nonsenior professional accountants in business.”

Section .07 under the heading Scope of ET 2.180.010 states as follows:

Section .08 of ET 2.180.010 under heading Scope further states as follows:

“Examples of laws and regulations which this interpretation addresses may include those that deal with the following:

a. Fraud, corruption, and bribery

b. Money laundering

c. Securities markets and trading

d. Banking and other financial products and services

e. Data protection

f. Tax and pension liabilities and payments

g. Environmental protection

h. Public health and safety.”

Section .09 under the heading Scope of ET 2.180.010 states as follows:

Thus, scope is broadly defined as noncompliance or suspected noncompliance and is not limited to what might be considered traditional CPA financial issue areas but also includes serious adverse consequences that have a material effect on the employing organization’s financial statements in financial or nonfinancial terms and such noncompliance may include wider public interest implications in terms of substantial harm to investors, creditors, employees, or the general public. Sections .07, .08 and .09 also are not written to be all-inclusive.

The NOCLAR rules for CPAs in public practice are separately contained at AICPA Code of Professional Conduct ET 1.180.010, although under the facts of circumstances of the situation other ethics rules might well also apply. And, of course, issues of law and legal issues most likely will or may also be involved or at least relevant. ET 2.180.010 also is effective June 30, 2023, but early implementation is allowed. I will be discussing ET 1.180.00, NOCLAR rules for CPAs in public practice, in a separate blog post.

You may also like to view a few CAM-related posts (critical audit matters):

March 29, 2020 – Comments About Going Concern Uncertainties, CAMs, Etc. – Relevant In This Economic Environment,

February 22, 2020 – Can a CAM lead to or require an internal investigation,

September 22, 2019 – Takeaways from a PLI program that I recently viewed about CAMs (critical audit matters) . . . .,

July 17, 2019 – New July 11, 2019, PCAOB CAM Guidance for Audit Committees – Is A Matter A CAM (See Chart); And Responses To FAQs,

May 28, 2019 – A few Comments About Going Concern Uncertainties, CAMs, Etc.,

May 9, 2019 – PCAOB – Implementation of Critical Audit Matters Deeper Dive,

See also PCAOB AS 3101 which contains the requirement that audit firms for public companies are required to include in their reports a discussion of “critical audit matters” (“CAMs”).

More to follow on these and other audit, auditor, audit committee and board, and governance topics.

Thank you for reading. Please do pass this blog post and information to other people who would be interested as it is only through collaboration and sharing that great things and success are more quickly achieved.

* * * * * * *

Best to you,

David Tate, Esq. (and inactive CPA)

  • Business litigation and disputes – business, breach of contract/commercial, co-owners, shareholders, investors, founders, workplace and employment, environmental, D&O, governance, boards and committees.
  • Trust, estate and probate court litigation and disputes – trust, estate, probate, elder and dependent abuse, conservatorship, POA, real property, mental health and care, mental capacity, undue influence, conflicts of interest, and contentious administrations.
  • Governance, boards, audit and governance committees, investigations, auditing, ESG, etc.
  • Mediator and facilitating dispute resolution:
    • Trust, estate, probate, conservatorship, elder and dependent abuse, etc.
    • Business, breach of contract/commercial, owner, shareholder, investor, etc.
    • D&O, board, audit and governance committee, accountant and CPA related.
    • Other: workplace and employment, environmental, trade secret.

Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation, or as or for my opinions and views on the subject matter.

Also note – sometimes I include links to or comments about materials from other organizations or people – if I do so, it is because I believe that the materials are worthwhile reading or viewing; however, that doesn’t mean that I don’t or might not have a different view about some or even all of the subject matter or materials, or that I necessarily agree with, or agree with everything about or relating to, that organization or person, or those materials or the subject matter.

Please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

My two blogs are: – business, D&O, audit committee, governance, compliance, etc. – previously at

Trust, estate, conservatorship, elder and elder abuse, etc. litigation and contentious administrations

David Tate, Esq. (and inactive California CPA) – practicing only as an attorney in California.

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