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Strong whistleblower protection a must, new report says

In their joint publication, IFAC and CPA Canada highlight the importance of supporting people to speak up against wrongdoing

CPA Canada has long been at the forefront of efforts to advance a comprehensive whistleblower protection framework across the country. Last year, it launched a joint project with the International Federation of Accountants (IFAC) to examine the latest trends in legislation and research on the topic. The resulting report, Understanding Whistleblower Protection: Laws, Practices, Trends and Key Implementation Considerations, underlines the importance of having strong whistleblower protection legislation in place, while pointing to the role CPAs can play in supporting a speak-up culture and implementing appropriate policies.

Here, Michele Wood-Tweel, FCPA, vice-president of regulatory affairs at CPA Canada, and Sarah Mulhall, CPA, director of regulatory affairs and public interest at CPA Canada, discuss the report and other key whistleblower protection issues.

Why did CPA Canada and IFAC team up to write Understanding Whistleblower Protection: Laws, Practices, Trends and Key Implementation Considerations?

Michele Wood-Tweel (MWT)/Sarah Mulhall (SM): Whistleblower protection is an extremely important global issue and a matter of public interest.

In order to be on par with other jurisdictions, Canada needs to progress towards offering more comprehensive or holistic solutions involving whistleblower protection. Currently, there are many gaps in the patchwork quilt of discrete laws at the federal/provincial/territorial levels that are not integrated to protect whistleblowers.

CPA Canada has had a long association with IFAC, working together in many important areas of research, including anti-corruption and financial crime issues, which also involved discussions about global whistleblower protection legislative developments.

Recognizing that the accounting profession has a central role to play in championing the protection of whistleblowers, we decided to pursue this joint report. We hope it serves as a call for professional accountants and firms to join local, national and international discussions on the subject.

What is the importance of having a strong speak-up culture with respect to whistleblower protection?

MWT/SM: A strong speak-up culture is about ensuring that people have the capability, awareness and conditions available to speak the truth when they notice someone is doing something wrong.

Whistleblower protection offers many societal advantages and can support a strong speak-up culture that can be practised by anyone, regardless of their role, in all types of organizations, and in all sectors, whether private or public.

Whistleblowing has become a global issue today. Where do whistleblowing protection laws currently stand in Canada?

MWT/SM: Canada has committed internationally to advance whistleblower protection, as have many other countries around the world. But progress, especially on a holistic level, needs to be pursued in a more comprehensive fashion.

For example, Canada has discrete whistleblower protection laws at the provincial level, but they sometimes offer different types of protection, with no coordination at the federal level. A situation could arise where a person shares whistleblowing information in good faith under federal law, but might be held accountable under provincial law for doing so, and in a worst-case scenario face a civil lawsuit.

Elsewhere, in the U.S. for example, significant progress has been made, with a plethora of new whistleblower protection laws being introduced, as well as laws that provide financial awards to whistleblowers.

The U.K. already has the Public Interest Disclosure Act 1998, which is more comprehensive and holistic than Canada’s legislation.

The European Union has a directive for its member countries to implement whistleblower protection, and most member countries have complied to some degree.

Although perfection does not exist anywhere in the world with respect to whistleblower protection laws, forward momentum is important, and Canada needs to focus on how to improve laws for individuals who are willing to act in the public interest when confronted with, or aware of, wrongdoing.

What are the economic impacts of having strong laws that promote whistleblower protection?

MWT/SM: The economic impact of having strong laws promoting whistleblower protection as well as a speak-up culture to address corruption or other improper behaviour can be profound. As detailed in the report, whistleblowers detect more fraud and economic crimes than other methods of detection and some jurisdictions have quantified the potential benefits in the public sector alone to be very significant.

From a corporate standpoint, they help ensure that money is being spent where it is supposed to—for example, that the right prices are being paid for goods and services, with no inappropriate or illegal activities and/or payments tainting the transaction.

Whistleblower protection can be an effective tool to combat financial crimes such as money laundering and terrorist financing. Why is it also important to view whistleblower protection on a holistic basis?

MWT/SM: In addition to combatting financial crime, whistleblower protection can also have a positive impact on many other areas such as the environment and personal health and safety.

Anyone, including employees, managers or even volunteers, might know about some impropriety taking place in their organization that they recognize needs to be spoken about, and that can stop wrongdoing, and perhaps even prevent a tragedy.

How is CPA Canada lending its voice to advocacy on this topic? What are some key areas of concern it has highlighted?

MWT/SM: CPA Canada has expressed its advocacy for stronger whistleblower protection for many years, including through consultations and pre-budget submissions to the federal government. Among other concerns, it has pointed to the lack of a holistic or comprehensive whistleblower protection framework right across Canada, and the need to close visible gaps.

CPA Canada also testified about the need to improve whistleblower protection at the Commission of Inquiry into Money Laundering in British Columbia (Cullen Commission) which released its report in 2022.

What is the ‘eight-point tool’ questionnaire within the joint CPA-Canada/IFAC report, and how is that designed to help guide accounting professionals and organizations and other users in adopting and implementing whistleblower protection legislation?

MWT/SM: Whistleblower protection policies need to be tailored to fit into the unique legislative and regulatory framework in a particular jurisdiction.

This ‘eight-point’ questionnaire provides a framework for accountancy professionals, policy makers and others to consider and discuss what has been learned about whistleblower protection, including associated best practices. It can help professional accountants to establish policies and procedures that are right for their organization and help policy makers adopt and implement whistleblower protection legislation for their jurisdiction.

What can CPAs do to help protect whistleblowers from harassment, reprisal/retaliation and persecution in their own organizations?

MWT/SM: The need for CPAs to get involved in promoting whistleblower protection addresses the core of speak-up culture, and the championing of ethical and responsible business. Supporting whistleblowing helps organizations be more resilient, proactive and accountable against issues of wrongdoing.

CPAs can get involved by implementing applicable legislation from a risk and compliance perspective. They can also advance and champion safe and effective organizational whistleblower channels for employees and others to disclose wrongdoing while reinforcing good governance, ensuring action is taken when matters are reported.

CPAs can support whistleblowing policies and frameworks no matter what their role within an organization—whether they be employees, managers, board members, or volunteers. In so doing they can play a critical role in acting as conscience of their organization, especially when other motivations—financial or not—might tempt decision-makers and others to venture down the wrong path.

LEARN MORE

Read the joint CPA Canada/IFAC report on whistleblower protection and consult CPA Canada’s extensive AML resources.

Plus, make sure to read our interview with Stephen Shedletzky, author of Speak-Up Culture.

Photo caption: Whistleblower protection is an extremely important global issue and a matter of public interest (Shutterstock/ Shawn Hempel)

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