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Issue 26 April - June 2014
LEGAL c o n t .
which he was not entitled and was late in producing theAFS
for various years.
Consequently the related tax returns were not rendered on
time. In addition the practitioner failed to answer
correspondence from the Board appropriately.
The practitioner was fined R75,000, R25,000 of which was
suspended for three years on conditions, with a
contribution of R5,000 towards costs, and publication in
general terms.
?
One matter
related to a JSE listed company where
financial statements contained errors arising from the
application of IFRS 3, Business Combinations, and IAS 32
and 39 relating to Financial Instruments on which the
practitioner issued an unmodified opinion. The disclosures,
which were inadequate, had been prepared by the
company’s IFRS advisor.
The practitioner had not audited the disclosures but relied
on the work of the company’s IFRS advisor. Reliable
information was available to the practitioner when the
financial statements were issued, and could reasonably be
expected to have been obtained and taken into account in
the audit of the financial statements. As a consequence of
the inadequate disclosures in the financial statements the
practitioner’s unmodified opinion was inappropriate. The
practitioner should have issued amodified opinion.
The practitioner was fined R100,000, with an order of
R5,000 towards costs, and publication in general terms;
?
One matter
related an attorneys trust account where the
practitioner issued an unmodified assurance report when
the attorney’s firm did not maintain proper accounting
records in compliance with the requirements of the
Attorneys Act and relevant Law Society rules, and the
balance in the trust banking account was less than the total
of the balances of the trust creditors thus indicating a
shortage. The practitioner further failed to answer or to
deal appropriately with correspondence from the Law
Society.
The practitioner was fined R100,000, with a contribution of
R5,000 towards costs, and publication in general terms.
?
One matter
related to the non-submission of various types
of tax returns by the practitioner while he was a sole
proprietor. He pleaded guilty to failure to submitting VAT
201, EMP201(PAYE), EMP201 (UIF), EMP501, IRP501 and
IT12 returns, in respect of his own business, in the
Magistrates Court. The practitioner was fined R50,000,
R25,000 of which was suspended for three years on
with a contribution of R5,000 towards costs, and publication in
general terms.
?
One matter
related to inadequate audit documentation
(working papers), inadequate disclosure in financial and
doubts about the respondent’s independence.
In respect of the audits of financial statements for two
reporting periods conducted in accordance with International
Standards on Auditing (as claimed in the relevant auditor’s
reports), the respondent failed to keep audit working papers
and/or failed to obtain audit evidence, alternatively he failed to
keep adequate working papers and/or he failed to obtain
adequate audit evidence in respect of the respondent’s
independence, risk assessment and response to assessed
risks, fraud risk, laws and regulations, related parties, a loan
receivable, litigation, going concern and subsequent
events. The respondent also failed to obtain an
appropriately datedmanagement letter.
In addition there were misstatements in the financial
statements arising from inadequate disclosures, including
the use of the going concern assumption when there were
going concern indicators and, as a consequence, the
respondent’s unmodified opinion which included an
emphasis of matter paragraph with regard to the going
concern was inappropriate.
At the time of issuing the auditor’s report, the practitioner
had received a significant loan from the company that gave
doubt as to the respondent’s independence.
The practitioner was fined R100,000 with a cost contribution
of R5,000. As the respondent was no longer
registered imposition of the sentence was postponed until
such time as the respondent may seek re-registration.
?
Two matters
related to the trust account of an estate agent,
which operated largely as a managing agent of body
corporates.
Unmodified assurance reports were issued for two
successive years by different practitioners when the estate
agent did not maintain proper accounting records in
compliance with the requirements of the estate Agency
Affairs Act, and the balance in the trust banking account was
significantly less than the total of the balances of the trust
creditors.
conditions,