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The Disciplinary Advisory Committee
met once during this period and
disposed of 25 matters, as follows.
Decisions not to charge
â
two
matters in terms of
Disciplinary Rule 3.5.1.1 (the
respondent is not guilty of
unprofessional conduct; this
includes the situation where the
conduct in question might be
proved but even if proved does
not constitute unprofessional
conduct);
â
four
matters in terms of
Disciplinary Rule 3.5.1.2 (the
respondent having given a
reasonable explanation for the
conduct);
â
six
matters in terms of
Disciplinary Rule 3.5.1.4 (being
that there are no reasonable
prospects of succeeding with
a charge of improper conduct
against the respondent);
â
one
matter in terms of
Disciplinary Rule 3.5.1.5 (being
that in all the circumstances it
is not appropriate to charge
the respondent with improper
conduct).
Decision to charge and matter
finalised by consent order
Eight
practitioners were fined:
â
The
first matter
related to
a communications solutions
company where various
arithmetical and VAT errors,
overcharging of services, errors
on arithmetic calculation of sales
transactions were found, all of
which remained undetected by
the Practitioner, who proceeded
to issue an unqualified audit
opinion. Furthermore, the
annual financial statements
were deficient in that they failed
to disclose foreign currency
differences and other costs
and services. In addition the
practitioner failed to keep and
/ or obtain adequate working
papers and audit evidence. He
was fined R75,000, R25,000 of
which was suspended for three
years on condition that he is
not found guilty of any offence
relating to work done during
the period of suspension with a
contribution of R10,000 towards
costs and publication in general
terms.
â
The
second matter
related to a
JSE listed environmental waste
management company, where
consolidated annual financial
statements (audited by a new
auditor) contained restatements
relating to prior period errors
which had been identified by
new management. The effect of
the most significant error was
that income, after tax, had been
overstated by at least 63% in
prior period (audited by the
practitioner). The prior period
errors arose from the failure of
previous management to use
reliable information, which
could reasonably have been
obtained and taken into account
by the practitioner, in the audit
of the prior period financial
statements. As a consequence
of the undetected errors
the practitioner’s
unmodified
opinion was
inappropriate. The Practitioner
was fined R100,000, with an
order of R5,000 towards costs
and publication in general terms;
â
The
third matter
related to
a body corporate where the
practitioner signed and re-issued
the annual financial statements
creating two different versions.
The amended annual financial
statements reflected that the
losses as originally reported,
were materially different from the
losses disclosed in the original
annual financial statements
for which no explanation was
provided by the practitioner.
Accordingly the audit opinion,
expressed in the amended
statements, was misleading in
many respects. Furthermore, the
practitioner used the offices of
his audit client; and was a trustee
to the body corporate which he
audited, thereby impairing his
independence. The practitioner
also assisted an accounting
firm, who were not registered
auditors, to create the false
impression that they were in
fact registered auditors.
The practitioner was
fined R100,000,
with an order
of R5,000
towards
costs
and
COntinued
LEGAL
INVESTIGATING COMMITTEE
The Investigating Committee met twice during this period (3rd October and 28 November 2013) and referred 25 individual
matters to the Disciplinary Advisory Committee with recommendations.
DISCIPLINARY ADVISORY COMMITTEE