Accountants globally have some new rules to follow when it comes to offering or accepting inducements, and they’re a little more explicitly stated than those for U.S. accountants.

The International Ethics Standards Board for Accountants has issued a revised standard that sets out a framework to more clearly establish the boundaries for acceptable versus unacceptable inducements. The standard is intended to guide the behavior and actions of professional accountants when they are faced with various kinds of incentives that are meant to elicit a certain type of response.

The new standard is meant to complement an earlier pronouncement on how accountants are expected to respond to discoveries of “noncompliance with laws or regulations,” or NOCLAR. The IESBA standard on NOCLAR compels accountants to report such instances to relevant authorities under certain circumstances, but standards in the United States are more complicated due to client confidentiality considerations.

With respect to inducements, the IESBA framework clarifies what accountants should regard as an inducement and establishes a requirement for accountants to understand and comply with laws and regulations that prohibit offering or accepting certain inducements, such as in a bribery or corruption situation.

The IESBA standard also guides professional accountants on how to apply the framework when the inducement is not associated with any type of improper intent, and it provides guidance on offering or accepting inducements from immediate or close family members.

“Incentives motivate behavior, and some inducements can be a powerful incentive to unethical behavior,” said Stavros Thomadakis, chairman of the IESBA. “This revised standard complements our standard on NOCLAR to offer a full system of ethical defenses that relate both to malfeasance committed by others and to accountants’ own involvement in potentially unethical behaviors.”

In the United States, the American Institute of Certified Public Accountants does not have a single specific standard on inducements, but it has guidance throughout its body of standards that address inducements, says James Brackens, vice president for ethics and practice quality for public accountants. “The argument could be made that we have what we need in our code,” he says.

AICPA standards have language in different places about gifts or entertainment, integrity and objectivity, independence, campaign contributions, and pressure to breech rules that speak to the same concerns as the new IESBA pronouncement, says Brackens. The AICPA’s Professional Ethics Executive Committee has not determined whether it will consider any changes to U.S. guidance as a result of the recent IESBA standard, he says.

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