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The Disciplinary Committee sat once
on Saturday 2 November 2013 to
finalise a part heard matter, and
hear argument on sentence. The
practitioner, who had refused a
Consent order, had been found guilty
of one out of three charges brought
against her. She was no longer
registered as an auditor.
The charge on which the practitioner
was found guilty concerned the
calculation of negative goodwill,
its inclusion in the income statement
under operating profit, audit
materiality and the effect of this on
headline earnings per share.
The practitioner was fined R75,000,
suspended on condition that should
she apply to be re-registered as an
DISCIPLINARY COMMITTEE
publication in general terms. The
practitioner is no longer resident
in South Africa and the imposition
of this sentence was postponed.
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The
fourth matter
related to
a deceased estate and close
corporation (‘CC’) where the
practitioner misrepresented to
his client that the estate had
been wound up and finalised.
In respect of the CC he charged
fees to which he was not entitled
and was late in drafting the
annual financial statements
for various years. Where
required, he failed to describe
contraventions of the Close
Corporation Act in the reports on
the annual financial statements.
He failed to submit tax returns on
time or at all. He failed to answer
correspondence from the Board.
He was fined R75,000, R25,000
of which was suspended for three
years on condition that he is
not found guilty of any offences
relating to work done during
the period of suspension, with a
contribution of R5,000 towards
costs and publication in general
terms.
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The
fifth matter
related to an
attorneys firm’s trust account
where the practitioner signed and
issued an unqualified assurance
report. This was inappropriate
since the trust account reflected
a shortage of R1,480,528.42.
The report however stated that
the amount in the trust bank
account was the same as the total
amount in the firm’s trust creditors’
account. Accordingly the
practitioner failed to detect the
shortage; he failed to produce
adequate working papers and
audit evidence. He also failed
to answer correspondence from
the Law Society. The Practitioner
was fined R100,000, with an
order of R5,000 towards costs
and publication in general terms.
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The
sixth matter
related to two
B-BBEE verification agencies
(both companies) where the
practitioner was the sole director
of both. Neither company was
at any material time registered
with the Board, nor approved
by the Board to perform
verification assurance work. In
addition, the practitioner assisted
the companies to hold out as
registered auditors in public
practice. The Practitioner was
fined R50,000, 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
that period, with a contribution
of R5,000 towards cost and
publication in general terms.
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The
seventh matter
related to
the non-submission of tax return
by the practitioner while he was
a sole proprietor. He pleaded
guilty to failure to submit VAT
201, EMP 201(PAYE), EMP 201
(UIF), EMP 501, IRP 501 and
IT12 returns in respect of his
own business, in the Magistrates
Court. The practioner was fined
R50,000, 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 R5,000 towards costs and
publication in general terms.
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The
eighth matter
related to
a body corporate where the
practitioner issued an unqualified
report when he failed to detect
various thefts committed by
an employee. The practitioner
failed to obtain proper bank
confirmation letters and merely
accepted photocopies from the
managing agent of the Body
Corporate. The practitioner failed
to comply with International
Standards on Auditing during the
course of his audit. Accordingly
the report signed by the
practitioner was misleading. The
Practitioner was fined R50,000,
with an order of R5,000 towards
costs and publication in general
terms.
Decision to charge and matter
referred to the Disciplinary
Committee
Four
matters were referred to
the Disciplinary Committee for
disciplinary hearings.
COntinued
LEGAL