IRBA Newsletter 26

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FROM THE CEO ’ S DESK
The first half of the calendar year has come and gone. And we
continue to push the limits on our capacity to do more, achieve
more, and deliver more. These ambitious goals do not only
apply to the IRBA, but equally to the profession, which needs
to respond to the myriad of changes which continuously come
about fromdatamoving across our borderless world.
We attended the International Forum of Independent Audit
Regulators’ (IFIAR) meeting earlier in the year, and had the
privilege to meet Senator Sarbanes who co-authored the
renowned Sarbanes-Oxley Act (pictured on the cover). He
shared with us the process to legislate the critical reforms
following the business and audit failures at the time, and the
challenges encountered to ensure that there was an
understanding that the changes were required for the public
protection. It was an important reminder that, if all
stakeholders appreciated the ultimate objective to serve and
protect the public, the matters which were not so important
would take up less of everyone’s limited capacity spent on
legal and political processes. Twenty years into our own
democracy, we are still young, but have the advantage of
learning from others’ experiences and refocus our energies on
what will make a difference, not in the short term, but the
future.
While the International Audit and Assurance Standards Board
(IAASB) will be voting out the newAuditor Reporting Standard
at their September meeting, to respond to the needs of
investors and users for more information, South Africa has
been hosting the leadership from the International Integrated
Reporting Council to stimulate debate on the value of
integrated thinking and integrated reporting. This re-
emphasises the need to eliminate borders and collaborate at
all levels; and recognise that our current thinking must result in
sustainable solutions. Sustainability might be one component
of Integrated Reporting, but a critical component for the future.
We also need to appreciate the benefits of collaboration
between regulators and the profession. As part of our
inspections approach, we have been engaging with firms on
possible areas of improvement where our findings indicated
shortcomings. Appreciating that both the firms and the IRBA
share a common interest to maintain high audit quality, we
have had very positive meetings with the leadership of the
firms where we completed inspections and identified a need
for some remedial action. We also started to share the
common findings with the wider profession (refer to page 14).
Our workshops on the common reasons which lead to
investigations of auditors was a similar initiative to raise
awareness amongst auditors to be proactive in identifying
possible causes for audit failures.
While we continue to engage with the Treasury to implement
the recommendations in the World Bank’s Report on the
Observance of Standards and Codes (ROSC), which had
been adopted by the Minister of Finance, we have made some
progress on identifying the processes to introduce Limited
Liability Partnerships and structures for the regulation of the
wider accountancy profession. Although these are only two of
the recommendations in the ROSC, it will already go some
way to eliminate the current imbalance in oversight between
auditors and other accountants, including the Broad-Based
Black Economic Empowerment (B-BBEE) verification
industry. While it remains uncertain whether the IRBA will
regulate the B-BBEE verification industry, we have put in place
processes to support and regulate auditors who deliver
services in this industry. The ROSC is available at
Business and the profession have recognised long ago that
South Africa is not isolated from the continent of which it is but
one country. Similarly, the IRBA is planning initiatives to
engage more with jurisdictions on the continent to share best
practices and offer support to improve reporting and
governance inAfrica.
Finally, we are in the process of completing our final
consultation with the profession to prepare for the
implementation of the Audit Development Programme (ADP)
in January 2015. The ADP is the new programme to qualify
auditors and ensure that, when they register with the IRBA,
they have developed the necessary competencies to sign off
on audit reports on which the public place reliance, including
those competencies to function in a dynamic and increasingly
complex, but exciting, environment. We are also fortunate to
participate in projects to change the international standard on
auditor competencies, which will better equip auditors to
respond to this environment.
So we will continue to push the limits (and the borders), while
working with our stakeholders to achieve our common
objectives - which is why there is no better time than the
present to be part of the auditing environment.
2 Issue 26 April - June 2014
Bernard Peter Agulhas
Chief Executive Officer