ACC30008 Accounting Theory Report: Whistleblower Protection Evaluation

This report provides a comprehensive analysis of whistleblower protection laws, specifically focusing on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 passed by the Australian parliament. It examines the key changes introduced by the new law, including the broadening of eligible whistleblowers, protected disclosures, and the introduction of public interest and imminency disclosures. The report explores the universal dignity theory of whistleblowing and its relevance to ethical conduct within organizations. It delves into the implications of the new protection law on companies and public authorities, emphasizing the need for effective procedures, robust investigation practices, and reporting mechanisms. Recommendations for ASX-100 codes of conduct are provided to support the implementation of the new law. The report concludes by summarizing the key reforms and emphasizing the importance of whistleblower protection in ensuring transparency, detecting fraud, and promoting ethical practices in both the public and private sectors. It also highlights the significance of Sarbanes-Oxley and Dodd-Frank Act in providing anti-retaliation provisions for whistleblowers.

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Accounting Theory
Name
Professor
Institution
Submission Date

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Table of Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018......................................3
Universal dignity theory of whistleblowing.............................................................................................5
Implications of the new protection law....................................................................................................7
Recommendations.......................................................................................................................................8
Conclusion...............................................................................................................................................8
References.................................................................................................................................................10

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Executive summary
This report aims at the evaluation of the whistleblower protection amendment of
February 2019 by the Australian parliament. The report also seeks to outline the new provisions
of the new law. Moreover, this report aims at the evaluation of the implications of the new law to
the companies and public authorities. The report also seeks to recommend several ASX-100 code
of conduct principle which could be required to help in the implementation of the new
whistleblower protection law.
Introduction
Whistleblowing is also commonly referred to as public disclosure of all the material fact
which could be of much importance in the public domain. An acknowledgment is always
available whereby the whistleblower is recognized for the essential function performed in the
community. The whistleblower ensues that the public officers who deal with public money are
held into account and also to make sure that all the private actors operate within the provided
laws of the nation. The safety and; protection of the whistleblower is therefore very crucial and
an integral part of ensuring and fostering integrity, transparency and also in helping the detection
of fraud and any other misconducts or unethical practices whether in the public sector or in the
private sector (Slovin, 2016, pp.45-50). The law which protects whistleblowers aims at the
protection of information disclosure which in other cases would cause a breach of the law.
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018

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Some of the laws which are commonly bleached as a result of lack of a whistleblower are
the confidential information law and also the law of defamation. The law protecting the
whistleblower provides for s platform of legal remedies for the whistleblowers in the case of
suffered reprisal as a result of them making a disclosure. In Australia currently, whistleblowers
are protected under three main legislation provisions which are federal; the first federal
legislation is the public interest disclosure act of 2013 (PID Act), corporation act and finally, we
have the fair work (registered organizations) Act 2009 (RO Act) (Australia Takes a Big Step
Forward in Whistleblower Protection, 2019). The newly passed whistleblower legislation passed
by the Australian parliament is expected to commence its operations in July 2019. This will be
applicable if the royal asset will be given by 1st April 2019. If this will occur the subjection of
the public companies and authorities will have to comply with this legislation by January 2020.
The new law is expected to introduce several changes in the country and also there are
several concerns that authorities and private actors should be thinking about in regards to the
application and implementation of t6he provided changes in their business operations (Federated
Search Results – Parliament of Australia,2018). Moreover, the public and private sector should
be thinking of considering the currently existing global processes. The new law has come with
several changes since the first reading of the new legislation i9n December 2017. Some of the
key changes in the new whistleblower protection bill include; as compared to the past several
decades now it is easier for a disclosure to be protected (Voogt and Verreynne, 2018, p.1335).
The new law clears the doubt by making it more specific that a whistleblower will now be in a
position to make a protected information disclosure to the public.
This law has broadened the categories of the eligible blowers including the former
workers, associates as well as relatives. Moreover, this has also been made clear through the

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broadening of the category of the different individuals a whistleblower can report to. This new
law disqualified departmental managers and supervisors as the recipient of whistleblower
information and replaced them with the senior managers only. Moreover, the protection of
disclosure has been also more protected through the broadening of the category of disclosure
which is eligible for protection. Finally, the new law has removed the requirement which was in
existence that the whistleblower should disclose their identity and also to make their disclosure
in good faith. Another change which has been embraced by the new law is the public interest
disclosure and the immanency disclosure. This provides for the protection of disclosures made to
journalists as well as in parliamentary boards (Whistleblower reform in Australia – new
legislation enacted, 2019). In addition, the new law has provided for broader confidentiality
exemptions, easier procedures also have been introduced to claim compensation as compared to
the past legislation. The whistleblower policy has also been introduced by the new law and
finally, there has been an introduction of higher penalties for the lack of protection of
confidential information and also on cases of victimization.
Universal dignity theory of whistleblowing
Whistleblowing can be said to be both a duty and at the same time a [permissible to an
extent that through blowing the whistle or making a disclosure constitutes to the supportive of all
the business stakeholders on the financial, management in an organization or a public authority
or company. Ethical whistleblowing compels evidence of an illegal as well as unethical conduct
done by an employee or an organization and through so the dignity of the stakeholders is
deemed. If at all there was a lack of knowledge in the organization of the failure as well as the
wrongdoing to take the required collective measures. If the mention two conditions exist then

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ethical whistleblowing will be required unless the following exemptions are available. If a person
realizes that through blowing the whistle he will endanger himself as well as others into a risk.
In the past several years it has come to the realization that financial crises as well as
corruption have attracted increased corporation regulations and also in the financial industry.
Sarbanes-Oxley and Dodd-frank impose several obligations on financial reporting as well as
financial management obligations on most of the publicly traded companies. The act ales provide
protection to the whistleblowers who report all the employers’ laws violation. Most of the
employees often fail to report the companies or employer as a result of fear of realization of the
whistleblower (Arszulowicz and Gasparski, 2011). The Sarbanes-Oxley and Dodd-frank law
have a provision of anti-realization provision which provides for and encourages the employees
as well as the auditors to blow the whistle with respect to corporate and financial regulations.
In earning management also an employee or an auditor can blow the whistle in a case
where the achievement of the set business regulations is not followed. Earning management
promotes the transparency in the sharing of benefits to all the stakeholders of the business and in
cases where this is misconduct the employee or any other protected stakeholder can blow the
whistle. Moreover earning management provides for bias-free benefit disclosure to the public as
well as free and fair benefits sharing. Furthermore, in case s where there is a misrepresentation of
the reality of a company earning the auditor or the employee may blow the whistle to alert the
concerned bodies of regulation (Nugroho and Eko, 2012).
In earning management fraud and other unethical practices may occur when the
management comes to a realization of a gap where they can manipulate the write of values in
cases where an employee or an auditor realizes this report and disclosure should be made to the
public. Most of this occurs where there is incoming management and also when one of the

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managers is being fired. This manipulation if not reported or a whistle blown against the act it
may lead to the future reduction of a company or authority expenses. In Australia, corporate
failure resulting in unethical acts of a company is referred to as insolvency and also known as
bankruptcy in the United States of America.
In earning management a whistleblower will be expected to do so in several
circumstances of failure. Such instances include where the company is unable to identify it’s all
operating indirect costs and the shareholders and other stakeholders rely on the information to
make critical decisions. In cases whereby a default on an agreement on debt can be easily
associated with the corporate distress of the company, Moreover, in cases of corporate distress,
disclosure is required to be treated as an emergency or else there might be a punctuational
increase of the company direct and indirect costs. Finally, in earning management, the
whistleblower might be required when a company or organization are distressed financially and
facing a huge number of debts.
Implications of the new protection law
The new whistleblower protection law has got several implications on the companies and
authorities in terms of the code of conduct and procedures. The implications include; there is the
rule for a company to employ effective procedure and processes for a disclosure t be identified,
assessed, escalated, auctioned, investigated and reported. Companies are required to
communicate, distribute and clearly define responsibilities to their employees in respect to
whistleblower programs. This will include the consideration of who will be the recipient,
investigation department and also the decision maker to make a disclosure. Another implication
of the new legislation is that there is a need for robust investigation practices (Treasury Laws

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Amendment (Enhancing Whistleblower Protections) Bill 2017 – Parliament of Australia, n.d.).
As disclosure can attract can raise issues in confidentiality and also the importance of
precautions and also the due diligence exercise which will protect any harm which might be
faced by the whistleblower a clear framework needs to be set up.
Another implication of the new whistleblower protection legislation is the reporting and
oversight mechanisms. The management is required by the new law to be aware of all the
financial as well as non-financial organizational risks. The report making from the information
received from a whistleblower forms a part of this knowledge. The organizational re required to
take caution in the tracking of data and metrics which are confidential under the law and to
ensure that the set metrics are followed to the latter. Finally is the staff training, the new law
requires that the recipients of disclosure be trained on how to be effective in investigating and
receiving any disclosure and also to
Meet the required legal obligations.
Recommendations
Recommendations of the ASX-100 codes of conduct will also be required in support of
the new whistleblower protection law this is because a whistleblower will be required to express
the highest level of confidentiality while making a disclosure (Federated Search Results –
Parliament of Australia, 2018). Moreover, the recipient of the disclosure is also required to act
with confidentiality as they will be required to protect the identity of the whistleblower. Finally,
the whistleblower confidence to disclose any information will also give the recipient the courage
to research and also make a decision on whether to disclose or not to disclose.

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Conclusion
In conclusion, the new passed whistleblower law in Australia seeker to introduce new
reforms in the protection of the blowers as most of them fear to disclose useful information due
to identity disclosure. Among the provisions of the new law are identity protection, expansion of
the blowers as well as the recipient and finally the clear definition of emergency disclosure and
others such as media and parliamentary disclosure. Sarbanes-Oxley and Dodd-frank impose
several obligations on financial reporting as well as financial management obligations on most of
the publicly traded companies. In earning management fraud and other unethical practices may
occur when the management comes to a realization of a gap where they can manipulate the write
of values in cases where an employee or an auditor realizes this report and disclosure should be
made to the public. Finally, a recommended ASX-100 code of conduct which will be required
under the new legislation is confidentiality.

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References
Arszulowicz, M. and Gasparski, W.W. eds., 2011. Whistleblowing: In defense of proper action
(Vol. 1). Transaction Publishers.
Australia Takes a Big Step Forward in Whistleblower Protection. (2019, January 8). Retrieved
from https://acfeinsights.squarespace.com/acfe-insights/2019/1/8/australia-takes-a-big-
step-forward-in-whistleblower-protection
Federated Search Results – Parliament of Australia. (n.d.). Retrieved from
https://www.aph.gov.au/Help/Federated_Search_Results?q=Treasury%20Laws
%20Amendment%20(Enhancing%20Whistleblower%20Protections)%20Bill%202018
Nugroho, B.Y. and Eko, P.U., 2012. Board characteristics and earning management. Bisnis &
Birokrasi Journal, 18(1).
Slovin, D., 2016. Blowing the whistle: a well-designed, accessible whistleblower hotline can be a
powerful tool in the fight against fraud. Internal Auditor, 63(3), pp.45-50.
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 – Parliament of
Australia.(n.d.).Retrieved from
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1718a/
18bd102#_Toc513206639

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Voogt, T. and Verreynne, M.L., 2018. Director appointments: Expressing board care and
diligence. UNSWLJ, 41, p.1335.
Whistleblower reform in Australia – new legislation enacted. (2019, February 26). Retrieved
from https://hsfnotes.com/fsrandcorpcrime/2019/02/26/whistleblower-reform-in-
australia-new-legislation-enacted/