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FROM THE CEO ’ S DESK
The end of this first quarter of 2016 precedes a momentous
occasion in the history of the Independent Regulatory Board
for Auditors (IRBA) as 1 April marks 10 years since the
organisation came into existence.As an organisation, we have
developed and grown into an entity that we are proud of and
continue to earn the respect of our global counterparts and
local stakeholders. We also thank all our valuable
stakeholders for their support, which has contributed to South
Africa's number one ranking for its auditing and reporting
standards in the Global Competitiveness Survey for six out of
the past 10 years.
The IRBA is currently on a consultation programme with
various stakeholders to get their views on different measures
that are aimed at strengthening auditor independence. This is
in line with the outcomes of our latest inspections report, which
was published last year, in which auditor independence and
ethics came out as some of the top inspections findings. We
are currently engaging with audit firms, investors and users of
services rendered by registered auditors. The process will
culminate in the IRBA Board taking a decision on the best
possible solution to strengthen auditor independence.
As you might have read in a communique that we recently
issued, there will be changes in the role that the IRBA plays in
the Broad-Based Black Economic Empowerment regulation
space. The IRBA has been regulating B-BBEE approved
registered auditors (BARs), in relation to their provision of
B-BBEE assurance services, since their mandate to do so was
defined in Statement 005, Broad-Based Black Economic
Empowerment Verification, which came into effect on 1
October 2011. Statement 005 still remains in effect, as
detailed in the communique issued on 26 January 2015,
Clarification on B-BBEE Verification Engagements Performed
in terms of the 2013 Codes of Good Practice.
During the B-BBEE workshops and the IRBA roadshows held
in August and September 2015, we informed attendees that
the IRBA Board was considering withdrawing from the
regulation of B-BBEE assurance services. The IRBAhas been
engaging with the Department of Trade and Industry (DTI) and
other stakeholders to obtain an understanding of their vision
for regulation of the industry. Having consulted with the
leadership of the DTI, the IRBA Board has now confirmed its
approach, and has set up the steps to discontinue its
regulation of BARs.As a consequence:
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No newBARs will be registered as from1April 2016.
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No B-BBEE annual fee will be levied in respect of BARs for
the 2016/2017 year.
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Inspections of BARs will continue until the transition to a
new regulator is complete. These inspections will be
charged at an hourly rate as defined in the IRBAschedule of
fees with effect from1April 2016.
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BARs still need to declare the assurance fees invoiced for
B-BBEE (category B assurance work) for the period
January to December 2015 in their firms' Assurance Work
Declaration. However, these fees will no longer be included
in the calculation of the percentage of the total audit and
other assurance work for which the firms will be invoiced.
We will continue to keep stakeholders informed of
developments, particularly in relation to the requirements to
register with a new regulator, when such requirements are
known.
The IRBA will be hosting the IFAC International Accounting
Education Standards Board meeting in Johannesburg in April
2016. This is the first time that this meeting will be hosted in
Johannesburg and it will include an open forum to be attended
by all professional bodies and other stakeholders. We look
forward to hosting this event and to welcoming all the board
members to SouthAfrica. (See page 22 for more information.)
Finally, I would like to thank Laine Katzin, Director Education
and Training, who left the IRBA at the end of March to pursue
her business interests. Laine served the IRBA well over the
years and was instrumental in developing the Audit
Development Programme and ensuring that it is implemented.
We wish her well for the future.
Robert Zwane has been appointed as the Acting Director
Education and Training. He is currently a senior manager at
the IRBA and will serve in this new role until the recruitment
process is finalised. We want to assure all our stakeholders of
a smooth transition during these changes and that we have full
confidence in Robert to continue with Laine's sterling work.
Despite all the challenges that we face as a country, we need
to work together to ensure that our profession remains
credible and globally respected. And we look forward to the
continued collaborations as we persistently work to maintain
our standards, serve investors and the community, and protect
the public.
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Issue 33 January - March 2016
Bernard Peter Agulhas
Chief Executive Officer