March 27, 2014 Articles

Practical Implications of the Dodd-Frank Whistleblower Program

What the SEC's new approach to enforcement means for accounting and auditing firms.

By Dana S. Douglas and Kathleen M. Przywara

Every public company and financial firm subject to the enforcement jurisdiction of the U.S. Securities and Exchange Commission (SEC) employs internal and external accountants and auditors. These accountants and auditors, under the whistleblower program implemented under the Dodd-Frank Act, may now be able to use information obtained during professional engagements to blow the whistle on a client or employer and obtain a monetary award. This shift in SEC enforcement raises significant issues both for auditing firms and for an accountant who decides to file a complaint. There are many steps that auditing firms can take to enhance their own internal reporting procedures and thereby mitigate the whistleblower program’s effect.

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