The fall of BF Borgers raises an interesting question. Could an accountant—at Borgers or elsewhere—have blown the whistle on the embattled firm? More fundamentally, when accountants see financial fraud or other wrongdoing, can they report it to the government?

The answer is surprisingly tricky. Certified Public Accountants are bound by rules of professional ethics and confidentiality obligations. But that does not mean they can never report misconduct. Last year, new amendments to AICPA Code of Professional Conduct helped clarify when accountants can report financial fraud and other wrongdoing to the SEC or other government regulators.

Last year, Whistleblower Partners attorneys Chris McLamb and Eric Havian wrote about these new rules, called the “Responding to Noncompliance With Laws and Regulations” or “NOCLAR” rules, in the Journal of Accountancy.  Their article explained the when, where, and how of whistleblowing for CPAs, particularly those “in business.” In doing so, it discusses their ethical obligations under the NOCLAR rules, as well as the rewards and protections available to CPAs under the major U.S. whistleblower programs. Chris and Eric conclude:

It’s never easy to be a whistleblower. Even in the best cases, the experience can be stressful and destabilizing. The new NOCLAR interpretations provide a critical ethical framework for members facing this dilemma, but every would-be whistleblower faces unique circumstances and risks.

Members should thoroughly evaluate what protections and incentives apply to their situation and consider seeking legal counsel.

The ethical obligations and risks facing public accountants, such as those working for BF Borgers, are even more complex. At the same time, public accountants often feel compelled to stop wrongdoing before it can harm consumers or investors. Experienced attorneys can help determine what options are available for CPAs facing this dilemma.

You can read the full article in the Journal of Accountancy.

The attorneys at Whistleblower Partners have successfully represented several accountants in whistleblower matters under the SEC and IRS whistleblower programs, as well as under the False Claims Act. If you would know of accounting fraud or other misconduct involving CPAs or their client businesses, please contact us for a confidential consultation.