“I think we should pay whistleblowers.”

This statement, made by Serious Fraud Office Director Nick Ephgrave in February last year, marked a sea change in how the UK approaches whistleblowing. Ephgrave cited the US as an example of good whistleblowing policy, where 86% of the civil settlements and judgments recovered by the US Department of Justice in 2022 were based on whistleblower information. 

In March 2025, Exchequer Secretary to the Treasury, James Murray, announced that later this year HMRC will launch a new reward scheme for informants, targeting serious non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes. The scheme will take inspiration from US and Canadian ‘whistleblower models’, rewarding informants with a percentage of any tax taken as a result of their actions. 

These two speeches illustrate the changing approach of UK regulators when it comes to obtaining evidence from whistleblowers that may lead to successful prosecutions in the public interest. They can be seen in the context of recent legislative changes introduced by the Economic Crime and Transparency Act 2023, which makes it simpler to prosecute companies. 

Defining whistleblowing

Whistleblowing is legally defined as where a worker discloses information, in the public interest, which relates to specific types of wrongdoing within an organisation. This wrongdoing could have happened already (past), be currently happening (present), or be likely to happen (future). 

The types of wrongdoing under this definition tend to fall into one or more categories: 

• criminal offences; 
• failure to comply with an obligation set out in law;
• miscarriages of justice;
• endangering of any individual’s health and safety;
• damage to the environment; or 
• covering up wrongdoing in the above categories. 

The role of professional accountants

For accountants, whistleblowing is a professional obligation. The ICAEW Code of Ethics contains detailed requirements that accountants must follow if they come across instances of Non-compliance with Laws and Regulations (NOCLAR), as covered under sections 260 and 360 of the Code. 

The Code’s NOCLAR provisions are a good example of the public interest role that the accountancy profession has. The Code requires that professional accountants comply with the fundamental principles, which include ‘integrity’ and ‘professional behaviour’. Specifically, the Code requires that professional accountants report to management when non-compliance is occurring or might occur, “so that they can deal with the consequences of the non-compliance”. They should take action to make relevant people aware of the non-compliance, where appropriate, in the public interest.

The NOCLAR provisions apply to laws and regulations that have a direct effect on material figures in the financial statements, and other laws and regulations that may be fundamental to an entity’s business and operations. 

How to act

ICAEW’s Code of Ethics sets out the steps accountants should follow in the event of a suspected NOCLAR. First, they should establish whether any legal or regulatory obligations are triggered. Consider legal prohibitions on making any further disclosure. 

Working in practice: report to the client’s management

Accountants in practice are required to report any non-compliance to the client’s management or those charged with governance (subject to legal and regulatory requirements). They should advise the client to rectify, remediate or mitigate the consequences, stop the non-compliance, or report it to an appropriate authority.

They should then assess whether the response of management is appropriate and sufficient, (complying with applicable standards). In the event that it isn’t sufficient, the accountant in practice needs to determine whether to take further action, in the public interest.

Working in business: use company whistleblowing procedures

Accountants in business should speak to their manager as part of the company whistleblowing policy, or use other established whistleblowing mechanisms if they think their manager is complicit in the NOCLAR. 

An accountant is permitted to disclose the NOCLAR to appropriate authorities without reporting it to management, but only in exceptional circumstances, where there is reason to believe that there is an imminent breach of law or regulation that would cause substantial harm to stakeholders.

Other conflicts

The International Ethics Standards Board for Accountants (IESBA) recognises that while professional accountants are bound by the Code to respond in the event of a NOCLAR, the situation is not always straightforward in practice. It can often be in conflict with the ethical duty of confidentiality.

Professional accountants are not expected to have deep knowledge of laws and regulations beyond what they need to know, but they are expected to apply knowledge, professional judgement and expertise. The new ICAEW Code of Ethics outlines provisions on the ‘role and mindset’ and ‘strength of character’ expected of professional accountants.

Revised section 110.A1(e) and R115.1(b) state that professional accountants “behave in a manner that is consistent with the profession’s responsibility to act in the public interest”. Section 111.1 A1 requires accountants to have “the strength of character to act appropriately, even when facing pressure to do otherwise or when doing so might create potential adverse personal or organisational consequences”.

In practice, this means standing your ground when confronted with difficult situations and moral or ethical dilemmas, and challenging others in a manner appropriate to the circumstances. 

Accountancy lacks whistleblowers

Despite whistleblowing being a professional and ethical obligation for accountants, the profession has few whistleblowers. This is something that the profession needs to better understand. Could high profile corporate collapses have been avoided if accountants raised concerns earlier? Could the implementation of SEC-style rewards encourage more whistleblowing? 

Part of the wider debate concerns the language used around payments for whistleblowers. Should it be a ‘reward’ for doing the right thing, or is it ‘compensation’ for the risks taken by whistleblowers who potentially lose their jobs and their livelihood? Some of these issues will be explored in a forthcoming ICAEW Insights podcast in September; there will also be a session on whistleblowing at ICAEW’s Annual Global Ethics Day Event in October.

David Gomez, ICAEW’s Senior Adviser, Ethics, says: “Speaking up about NOCLAR is the price of being a professional, and all professional accountants should respond appropriately whenever they suspect an incident of NOCLAR. We recognise that speaking up takes real courage. The ICAEW Ethics helpline is a confidential resource for members who find themselves in this situation. In addition there are resources such as CABA and organisations that specialise in this field, such as Protect.”

World Whistleblowing Day is a reminder that we, members of the ICAEW, cannot ignore when things go wrong. We have a duty to act. The announcement of SEC-style rewards for whistleblowers could work well as part of a broader solution, but its absence is not an excuse to ignore wrongdoing. 

The UK’s legislation is behind the EU, and we need to catch up – for example, by putting in place legislative safeguards to ensure the payment scheme for whistleblowers is not abused.

On their part, accountants need to continue to support and promote ethical company cultures, encouraging appropriate speak-up procedures and a sense of honesty and integrity within the organisation. And when a NOCLAR occurs, do not ignore your duties.