Accounting Theory Report: Analysis of Whistleblower Legislation

This report analyzes the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018, passed by the Australian Parliament, focusing on its implications for corporate and financial sectors. The report details the background and intent of the new legislation, contrasting it with previous regulations. It examines the evidence supporting corporate whistleblowing, explores relevant theories, and discusses the implications of the new legislation for companies, particularly in terms of procedures and codes of conduct. Furthermore, the report refers to an exemplar ASX-100 code of conduct, highlighting elements needed under the new legislation and providing justifications for its exemplary status. The assignment aims to provide insights for the CEO of Westpac Ltd, offering a comprehensive overview of the changes and their impact on corporate governance and accounting practices.

Running Head: ACCOUNTING THEORY
ACCOUNTING THEORY
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Background and Intent of New Legislation...........................................................................2
Difference of New Legislation from Previous Legislations..................................................3
Evidence and Explanation of Theories..................................................................................5
Implications of new Legislations...........................................................................................6
Referral to Exemplar..............................................................................................................7
Conclusion..............................................................................................................................8
Reference....................................................................................................................................9

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Introduction
The aim of this assignment is the analysis of the accounting theory and reports it to
the CEO of Westpac Ltd. The Treasury Laws Amendment (Enhancing Whistleblower
Protections) Bill 2018 has been passed by the Australian Parliament on 19 February 2019. It
has created the single regime for the financial and corporate sectors. In addition, it has also
created the regime for those whistleblowers that have exposed the tax misconduct. Hence,
under this assignment, discussion will be done on the background and the intent of the new
legislation, explanations of how the new legislations is different from the previous
legislations. In addition, the evidence about the corporate whistle blowing as well as
explanations of the theory will be discussed. Moreover, the implications of the new
legislations for the company in the terms of procedures and the code of conduct of the
company will be discussed. Lastly, the referral to an exemplar ASX-100 will be provided
which includes the elements, which is needed under the new legislations and explanation will
be done on the reason of exemplary of code of conduct (Aph.gov.au. 2019).
Background and Intent of New Legislation
Background
Whistle blowing is most often referred as the public interest disclosure. The whistle
blowers generally perform the vital functions in the community which ensures that the private
entities operates within the rules and regulations prescribed in the law and the officials of
public entities are held to the account. Therefore, protecting of whistleblowers is integral part
in order to foster the transparency, detecting misconduct and promotions of the integrity.
The laws that is framed for protecting the whistleblowers aims for protecting the
disclosures that would breaches the law otherwise such as the law of the confidential

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defamation and information as well as providing the legal remedies of the whistleblowers if
in any case they suffers from reprisals in order to make the disclosures (Aph.gov.au. 2019).
Intent
Intent of the new legislation is as follows:
 The Corporation act 2001 will broaden and consolidate the existing protection and the
remedies for the whistleblowers of corporate and financial sector.
 The TAA 1953 will create the regime for whistleblower protection for the disclosure
of the information by the individual in relation to the breach of the tax laws or the
misconduct relating to the tax affairs of the entity.
 Repealing the whistleblower regimes of the financial sector as well as clarifies the
transitional arrangements (Aph.gov.au. 2019).
Difference of New Legislation from Previous Legislations
 The list of the ‘eligible persons’ has been narrowed to whom protected disclosure
have to made by removing of the “managers or supervisors” with the “senior
managers”. If there is “managers and supervisors” as the recipients of the reports of
whistle blowing then maximum number of employees, even if someone is at junior
level have to be trained for going through the whistle blowing reports (Aph.gov.au.
2019).
 `There is exclusion of most of the disclosures of the grievances related to personal
work from the protection. These changes have limited the protection for the
information’s disclosures which concerns any matter of grievances relating to the
employment disclosures. These grievances that are personal remains protected if in
any case they concern the detriment for the disclosure in contravention with
victimizations provisions or if the disclosure made to the practitioner of legal for

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obtaining the legal advice in relation to the operations of whistle blowing
(Aph.gov.au. 2019).
 It is giving the whistleblowers the benefit for making the claim for the compensation
that is against the corporate body if in case the corporate body breaches their duty and
allows any third party for victimizing and trying to expose the whistleblower
(Aph.gov.au. 2019).
 It excludes the “due diligence” which is as defense to the corporate body breaching of
their duty in order to protect the whistleblower. Instead it allows the Court for
considering the exercise of the due diligence as the mitigating factor while assessing
the liabilities of the employer (Loyens and Vandekerckhove 2018).
 There has been significant increase in the penalties that is in line with Treasury laws
Amendment Bill 2018(Strengthening financial and Corporate sector penalties)
Apart from above, other differences include following:
 Disclosure of new public interest that is based on the test of the broad public interest
in which the individual can make the disclosure to the parliamentarian or journalist if
90 days have been passed since disclosure to the prescribed authority has been made
(Brown and Silver 2015).
 There is the provision for category of emergency disclosure that is the based on the
belief of the disclosure regarding the imminent and substantial danger to the health
and safety of the person or the natural environment (Hail and Brown 2018). This type
of disclosure does not require for waiting for any period of time by the disclosure,
after the disclosure have been made to the authority prescribed before the disclosure
made to the parliamentarian or journalist. There is removing of the reference to the
‘serious harm to the financial system’, which is the jurisdiction in order to make
emergency disclosure (Maxwell 2018).

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Evidence and Explanation of Theories
According to Emanuela Ceva, Whistle blowing is referred as the reporting practice of
illegal or immoral behavior by the legitimate organization’s members privileged in accessing
to the information concerning with the alleged wrongdoing in the organization. As per her,
the important reason of wrong doing is its consequences of generation of the climate of the
mutual distrust. This distrust is increased in case of the external whistle blowing; this leads to
the weak the trust of the public in the organization by the diminishing of its credibility.
Therefore, Whistle blowing is justified as corrective practice that is dutiful within the general
normative theory of the organizations; it is because of the fact that it qualifies the institutional
and individual moral demand that is attached to the rules governing institutional roles (Ceva
and Bocchiola 2019).
According to Ariane David, the first step in creating the positive outcome by
disclosing of the wrongdoing is the realization on the part of managers that, whistle blowers
are also the most valued employees who perform the beneficial function for the entity It can
be done by partnering with the whistleblowers by the use of good plan of whistle blowing,
the management of the company can discover the powerful building of the trust as well as
collaborating with implementing the change (Ariane David 2019).
According to Michael Davis, Section 922 of the Dodd frank act, which is since 2010,
required SEC for giving the financial reward to the whistle blower who tried to voluntary
discloses the information of fraudulent activities. However, the author said, the definition of
whistleblower is not changed by incentives rather by the understanding of the whistle
blowing justification. There should be distinction between whistle blowing justifications by
public, the public defense from the personal justification, the whistleblower defense should
present to the conscience. Motive is relevant only in case of personal justification (Davis
2019).

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According to Manohar Kumar, Whistle blowing is referred as the act of the disclosure
of the fact from the private or public organizations for revealing the cases of the corruptions
which are immediate or having potential danger to public. However, it involves risk,
especially in absence of legal protection as well as charges of betrayal that come into the
form of the legalized prosecution under law. There is the argument by the author that,
justification of whistle blowing is inter alia when the conveyed information is of the public
interest as it reveals the example of the injustice or the violations of the political or civil
rights done against the some members of polity (Santoro and Kumar 2019).
Accounting to Eileen Z. Taylor, moral intensity is related to both the measures of
reporting and intention, Moreover, while the professional identity that is of higher level
increases the likelihood that initially the auditor will report the observed violation, the
commitment of the auditor to the company drives the reporting perseverance. The results
assists the researchers and organizations for understanding the whistle blowing antecedents
that is a form of the corporate governance as well as the effect of the antecedents on the
perseverance of whistle blowing (Taylor and Curtis 2019).
Implications of new Legislations
The new legislation has implication on the cost and its resources for implementations.
The new amendments in the whistle blowing protection have the positive effect on the
company in terms of procedures and the code of conduct of the company. The new reform
intend for the harmonization of the employees as well as protecting and remedies are
available for the whistle blowers and it has introduced the requirement for the certain
companies for implementing the policies of whistle blower (Nicholson and Pasternak 2018).
It has emphasized the company for making the qualifying disclosure. This has helped
in order to strengthen the prohibition against victimization of the whistleblowers. The new

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regime has helped company to make the procedures of the whistle blowing protection
simplified. It is because of narrowing of the eligibility of whom to be reported (Akbar and
Ahsan 2014).
The new regime has helped the company to increase the scope of the code of conduct
of the company by protecting the disclosures about the broader ranges of the misconduct that
includes the concerns about the corporate corruption, fraud, bribery, money laundering as
well as terrorist financing, as compare to earlier disclosures that was limited. This new
regime has also implications on the code of conduct because of allowing the protected public
interest disclosure (Darbyshire 2018).
The new regime needs to be adhering by every private and public company. If any
companies are found that they are not adhering to this act strict actions will be penalized and
strict action will be taken by the regulator and government. Hence, the companies have the
implication of procedures, which to be adopted very strictly (Carman 2018).
Referral to Exemplar
The exemplar code of conduct of ASX-100 Code of Conduct that can be included in
the new legislations should be fair and safe working environment. The new regulations of
Treasury amendments act 2018 (whistle blowing protection) must be adhere to the fair and
safe working environment. It is because; whistle blowing is practiced in the better way only
when the companies provide the fair and safe working environment (Akbar and Ahsan 2014).
The value of ASX defines that they interact with each other that is the stakeholders and the
customer is only possible with the fair diverse workforce and safe working environment. This
code of conduct if included in the new regulations will enhance safety to the whistle blowing
as well as it will provide a healthy and safe environment so that they are totally independent

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and safe for disclosing the fact and no one in the company are liable or try to expose the
whistleblower (Branson 2014).
Conclusion
Therefore, it can be concluded from the analysis that the new amendments done in the
legislation of Treasury Laws Amendments (Enhancing Whistleblower Protections) Bill 2018
will improve the overall effectiveness of the protections that exists for the whistleblowers
through the enhanced definitions, harmonized remedies for any breaches and clearer
protections. Further, the implications of the new regulations on the company have increased
the scope of code of conduct of the company. Lastly, the exemplar of ASX-100 code of
conduct that can be included in the new legislations should be including of the code of
conduct of fair and safe working environment, so that the whistleblower can feel safe and
independent for disclosing the facts in the safe environment of the company. Therefore, this
amendments done on the whistle blowing protection has wide scope and beneficial from both
company and whistleblower point of view.

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Reference
Akbar, S. and Ahsan, K., 2014. Analysis of corporate social disclosure practices of Australian
retail firms. International Journal of Managerial and Financial Accounting, 6(4), pp.375-
396.
Aph.gov.au. (2019). Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill
2017 – Parliament of Australia. [online] Available at:
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1718a/18bd102
[Accessed 6 May 2019].
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School of Business and Management | Pepperdine University. Available at:
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Zealand), Forthcoming.
Brown, L. and Silver-Balbus, S., 2015. A Triumph for a Transparent and Accountable
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Justification of Whistleblowing. [online] Philpapers.org. Available at:
https://philpapers.org/rec/CEVPTP [Accessed 6 May 2019].

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Darbyshire, T., 2018. Whistleblower protection reform is imminent: Boards take
note. Governance Directions, 70(5), p.253.
Davis, M. (2019). Rewarding Whistleblowers: A Conceptual Problem?. [online]
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pp.7-17.
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