New Audit Profession Bill tightens oversight

…… article dated 30 September 2020…..

Powers of search and seizure proposed….

In a recent  joint meeting of the  Standing Committee on Finance and the Finance Select Committee, both National Treasury and the Independent Regulatory Board for Auditors (IRBA) briefed MPs on changes proposed to the Audit Profession Amendment Bill on investigation and disciplinary processes, similar to changes recently effected under the Financial Matters Amendment (FMA) Bill which allows for search and seizure of records.

Chairperson of the joint meeting was Yunus Carrim of the NA portfolio committee and Joe Maswanganyi represented the NCOP select committee. Both are known to be supportive of the work of IRBA.

Search & seize

As part of the brief to MPs, Treasury took the opportunity to inform the House that concern had been expressed in some quarters on whether the newly introduced provisions under the Audit Profession Act on the powers given to the state for search and seizure were both legal and constitutional.

Adv. Empie Van Schoor,  head of legislation at Treasury, said in answer to this that most decidedly such powers were legitimate, a matter which had been cleared up with banks and financial institutions earlier under the FMA Bill when in process.  He said his office was to approach those parties who were concerned about the same issue under this tandem Bill.

Broadly speaking

Adv. Mulaudzi of Treasury said the audit profession amendments now being considered included the  strengthening governance controls; registration requirements for auditors; the reporting of irregularities; sanctions and the power to enter and search premises and to subpoena persons.

Important also were the proposals to prohibit removal of registered auditor before that auditor completes process of reporting irregularities to IRBA and for the enforcement committee to be able to refer non-audit but professional matters brought against an auditor.

Audit issue or not

Jillian Bailey, in charge of investigations at IRBA then briefed members  on the changes to the investigation processes that the new Bill would bring about.    In future, at the start of the investigation a step would be involved now for the investigations committee to determine if the complaint is an audit matter or non-audit matter.

Once the matter the matter was fully investigated and the appropriate decision made, Ms Bailey said, an Enforcement Committee would take charge deciding if the matter was to be dismissed; whether to accept and admission of guilt and deal with the fine; or go forward with disciplinary hearings.

Closing the matter

Ms Bailey said that the date of any sanction hearing was to be set down within 30 days of a decision on guilt being made and the sanction was to be issued by the disciplinary hearing panel five days after the sanction hearing.

As part of the closing comments on the short meeting, co-chair Joe Maswanganyi pointed out that this Audit Profession Amendment Bill was particularly important in his view “in the light of the global trend of auditors being paid to turn a blind eye to major auditing issues and problems.”

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