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13. THE INCREASING ROLE OF

WHISTLE-BLOWING
8.1 INTRODUCTION
)Meaning : The term whistleblower is derived from the practice of
uldblow their whistles when they noticed the English Policemen, who
commission
hoth law enforcemernt oficers and the general public of
ofa crime. The whistle would alert
danger. Whistle
Suspicions of illegalor improper behaviour to aperson in authority. blowing' means reporting
Types of Whistle Blowers : There are different types of whistle blowers
which are described as
following :
ia) Internal : When whistle blower, while being employed with the
organisation, reports the
WTong conduct or activities of an official or a colluded effort by a group of people in
organisation.
(b)External :When the issues pertaining to the wrong practises or wilful misdeeds are reported
by people who are outside the system - these people can be individuals or in the form of
organisations such as media, public interest groups or any other such agency. Such whistle
blowers are known as external whistle blowers.
(c)Alumni : When the whistleblowing is done by á person who is no more employed by the
organisation but he is acting on the willful wrongdoings he has witnessed during his
employment with the organisation. Such ex-employees can unearth such deliberate
mismanagements with the relevant authorities.

13.2 WHISTLE BLOWING UNDER WHISTLE-BLOWERS PROTECTION ACT, 2011

) Law: In India the Whistle-blowers Protection Act, 2011 was passed by Lok Sabha in 2011,
Rajya Sabha in 2014 and finally enacted after President's assent in 2014.
) Definition: Under the Act, Whistle Blowing' is defined as -An act to establish a mechanism to
receive complaints relating to disclosure on any allegations of corruption or wilful misuse of
power or wilful misuse of discretion against any public servant and to inquire or cause an inquiry
Into such disclosure and to provide adequate safeguards against victimisation of the person making
SilChcomplaint and for matters connected therewith and incidental thereto,"
)Frotection: The Act seeks to protect whistle blowers, i.e. persons making a public interest
servant.
dISclosure related to an act of corruption, misuse ofpower,or criminaloffence by apublic
organization
bsclosure: Any public servant or any other person including a non-governmental
Commission.
ihay make such a disclosure to the Central or State.Vigilance
complaint has to include the identity of the complainant. The Vigilance
entity : Every
except to the head ofthe department
Omission shall not disclose the identity of thecomplainant
 (c) Part of risk management to protectthe organisation's long-term wellbeing and reputation.
Who ?
Who can be a whistleblower?
e are dìfferent types of persons who can be whistleblowers and therefore covered by the policy.
se persons can be broadly classified as internal (employees, contract workers, vendors, etc.) or
enal (customers,members of the public etc.). The policy should clarify if it is strictly meant as an
nalpolicy or whether the policy also covers "outsiders" or third parties.
Who to make the disclosure to?
ohistleblower policy may cover internal and/or external persons to whom disclosure may be
de. Internal persons may include the following
Line manager
CEO/CFO
Head of HR
Head of internal audit
Company secretary or legal counsel
Designated ethics officer
Board audit committee or chairman of audit committee
ternal personsmay include the following:
Company-appointed whistleblower service provider e.g. ethics hotline
Company-appointed external lawyer
Independent, external organisation providing free advice on whistleblowing
Regulatory bodies or equivalent, including the police
Media
FWho is responsible for following up and investigating when a disclosure has been made?
The policy should state that an investigation will ensue after a report has been made. The policy
should provide information of any other persons who will be informed of the disclosure (e.g.
board of directors, HR, etc.) inorder to follow up. The board of directors shouldbe involved in
deciding who should be tasked to lead the investigation.
Ihe policy should undertake to keep the whistleblower informed of the progress and, subject to
egal constraints, the outcome of the investigation. It should also include the caveat that blowing
the whistie does not lessen the guilt or criminal liability of awhistleblower who is involved in
WTOngdoing,although this may be taken into account.
lhere should be a proper process for undertaking investigations of complaints.
Who will provide or ensure protection of the whistleblower?
ensure the welfare of the
POBhcy may specify the appointment of a company representative toinvestigation. It may also
eblower and who will also update the latter on the status of the
ywho a whistleblower can approach if he feels that he has suffered a detriment.
What ?
What are the types of breaches that can be reported?
concerns that could have a large
Poicy should emphasise that it is intended to cover serious normal feedback and grievance
from the
a mpact on the organisation, so that it is differentiatedby the policy could include aetions that:
Savalable to employees. Serious concerns covered
392 indicates that accounting ethics educatios
also
Training: The evidence programs. With limited ethics cOverage in the
Adequate Ethics bave
(4)Need significant way inmost learning accounting professionals will
is not covered in a uniikely that trainer
learning programs, it is corporate
role of member bodies, ethics traininp
business and accounting ethics. Therefore, it is the
sutticient relevant training inensure professional accountants receive adequate
and education providers to
ETHICS EDUCATION
14.2 GOALS OF be identifed
structure in which ethical threats or issues mayethical is sues
Ethicseducation provides a learning and competence to resolve
analysed, so that accountants possess the skills
well-informed decision and take appropriate
and able to make a
Ultimately, accountants must be ethics education include:
responsible actions. Specific goals of expectations of ethical and professional conduct
standards and
Enhance the knowledge of relevant with ethical sensitivity and an
appreciation of
professional responsibility
Develop a sense of
ethical threats.
sharpened ethical decision-making skills.
Improve professional judgement with
Develop a commitment to ethical behaviour.
Let us study these in detail. professional
must understand the relevant ethical and
(1) Knowledge : Professional accountantsknowledge
standards of accounting.Without core of ethical and professional principles, ethical
outcomes are unlikely.
threat or issue when it occurs
(2) Sensitivity : Ethical sensitivity is the ability to recognise an ethical
ethical solution and how each
and being aware of alternative courses of action leading to an
alternative course of action affects the parties concerned. Enhancing ethical sensitivity through
ethics education willenable accountants to more readily identify dificult situations, which they
must then resolve. The ability to make ethical judgements and behave ethically, presupposes the
accountant's ability to recognise an ethical issue when it arises. If professional accountants are
ethically sensitive to the issues they face,then the decision-maker is more likely to use ethical
principles in resolving the dilemma.
(3) Judgement : Professionalaccountants must expand their decision-making frameworks to include
an increased emphasis on ethical values as differentiated from quantitative values. Core ethical
values are an important part of ethicaldecision making. Choosing the rightvalues requires ethics
knowledge, an understanding of the consequences, and ethicalsensitivity. Such knowiedge and
sensitivity can be taught and developed in ethics education programs.
(4)Ethical behaviour :Accounting professionals must not only be adept with the technical aspects
of their responsibilities but they must also be able to deal with situations where
the facts are
ambiguous or stakeholders' interests conflict. Therefore, accountants must not only
ethical issues but they must also be committed to take the action which is recognist
ethically
training provides accountants with the confidence to deal with an ethical conflict. sound. Ethics
on ethical decision-making and behaviour, Without training
their environment. accountants may easily succumb to the demands O

14.3 STAGES INETHICS EDUCATION

Ethics education is a lifelong
and continues throughout one's commitment which begins in the early stages of a
career. The stages in Ethics Education are pre-qualifyng prog
(1)Stage 1- Ethics knowledge :
Ethics education at this foundation stage described as:
fundamental knowledge on matters concerning instils in accounta
education at this stage focuses professional
on the intellectual values, ethics and attitudes. E
accountant or accounting learner understand the basic background which necessary to ensu
is
and the fundamental environment which influences decist
which govern one'stheories and principles of ethics, virtues,
actions. Ethics knowledge provides the and individual moral
intelligence for the learner. social, ethical and developal
emotional