14 / 18
1 4
Issue 27 July - September 2014
The IRBA may also take disciplinary action against individual
auditors and auditing firms for persistent noncompliance with
standards, breaching the code of ethics and noncompliance
with Section 90(2) of the CompaniesAct, which prohibits them
from providing audit and certain non-audit services to the
same client.
In 2014, 6% of the audit files of entities that were inspected by
the IRBAwere subjected to disciplinary procedures or forensic
investigation. However, it is encouraging to note that 90% of
auditors and auditing firms generally rectify the deficiencies
identified during inspections by taking remedial action.
Any member of the public has a right to lodge a complaint with
the IRBAabout an auditor or auditing firm and if the IRBA finds
merit in the complaint, it will investigate. This may lead to a
disciplinary process or forensic investigation, depending on
the findings.
The IRBA does not approach the management and/or audit
committees of companies whose audited financial statements
have been the subject of an inspection. However, the IRBA is
exploring ways to enable greater transparency in this regard.
Currently, companies' audit committees may ask to see an
auditor's inspection results when evaluating them for
appointment or reappointment, and the JSE requires that
auditors have satisfactory inspection results in order for them
to be accredited to audit a listed company.
There is often a misperception that the IRBA is there to protect
auditors and their clients, while in fact, its primary role as
regulator is to protect the interests of the public. At the same
time, it protects the reputation of the profession by monitoring
auditors' compliance and enabling them to measure their
competence against global standards.
The IRBA liaises regularly with regulators in other parts of the
world and participates in international committees, task forces
and forums, including the International Forum of Independent
Audit Regulators (IFIAR), which was set up in 2006 to share
best practice and knowledge of the audit market environment.
I NSPECT I ONS c o n t .
Imre Nagy
Director: Inspections
Telephone: 087 940 8800
Fax:
087 940 8874
E-mail:
inspections @irba.co.za