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charges he was fined R100,000, of which R40,000 was
suspended for three years on condition that the practitioner is
not found guilty of improper conduct relating to conduct during
the period of suspension. In addition, the Disciplinary
Committee ordered the practitioner to make a contribution of
R125,000 towards the IRBA's legal costs and that publication
occurs in general terms in the
IRBA News
without disclosing
the name of the practitioner or the name of his firm.
The
fourth case
of Mr WP was heard on 23-26 November
2015 and 27 Janaury 2016, at which sitting the matter was
concluded. The practitioner faced four charges of improper
conduct in respect of the audit of the consolidated annual
financial statements of a multinational financial services listed
company (the listed company) for the financial year ended 28
February 2009.
The essence of the
first charge
was that the practitioner had
failed to detect that goodwill relating to a Cameroon subsidiary
was impaired. This was despite the practitioner's own
assessment, as reflected in the working papers, that goodwill
impairment indicators did exist. IAS36 requires goodwill to be
tested for impairment when impairment indicators exist or at
least annually. The practitioner further failed to qualify the audit
opinion accordingly and the consolidated annual financial
statements of the listed company for the year ended 28
February 2009 were, as a result, materially misstated from a
profit perspective.
The practitioner was found guilty of the first charge. The
committee was of the view that the practitioner had failed to
exercise the requisite level of care and skill when auditing the
impairment testing done by management in respect of the
subsidiary.
In respect of the remaining charges, the committee found that
the pro forma complainant had not proven on a balance of
probabilities that the practitioner was guilty of the second, third
and fourth charges.Accordingly, Mr WPwas acquitted of these
charges.
Mr WP was ordered to pay a fine of R50,000, in respect of the
first charge, and to pay a contribution towards costs of
R100,000. The committee ordered that there must be
publication of a summary in general terms of the decisions on
guilt and sanction without reference to the name of the
Half Yearly Report for the Period 1 October 2015-31 March
2016
Disciplinary Committee
Due to the timing of the year-end deadline, the traditional
Legal Department report could not be included in the last
edition of 2015. However, all the details that would have been
covered in the October-December 2015 edition are in this
report.
In addition, certain functions have been re-arranged within the
IRBA. The investigations matters (from the Investigations
Committee and the Disciplinary Advisory Committee) will now
be reported on by the Director Investigations while reportable
irregularities (RIs) will be part of this report.
The committee sat eight times during this period to hear
five
matters.
The
first matter
, that of Mr MD, was a part-heard matter that
resumed from 26-28 October 2015 and was concluded on 14
January 2016. We have been informed that the practitioner
intends taking the matter on judicial review in the near future,
hence it is not appropriate for us to report on the findings in this
issue.
The
second matter
, also a part-heard matter against two
practitioners, was continued on 9, 10 and 13 November 2015
and was concluded on 9 March 2016. As in the previous
matter, we have been informed that the first practitioner
intends launching review proceedings against the findings
and sanction of the Disciplinary Committee pursuant to the
disciplinary hearing. In the circumstances, we have agreed to
suspend implementation of the sanction (which includes
reporting the matter in this publication), pending conclusion of
the review application, provided that the first practitioner
institutes review proceedings within two calendar months from
the date of sanction (24 March 2016) and prosecutes the
judicial review proceedings expeditiously, including any
appeals.
The
third case
of Mr JD was heard to finality on 23 November
2015, after being postponed on 26 November 2014 by
agreement without any evidence being led. The practitioner
pleaded guilty to two charges of negligence relating to the
audit of an attorneys' firm's trust account. In respect of both the
Issue 33 January - March 2016