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Issue 35 | July-September 2016
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INVESTIGATIONS c o n t .
Matter 8 –
The matter arose from a referral by the Law Society
of the Northern Provinces. The respondent carried out the audit
of a purportedly dormant attorneys’ trust account. However, the
respondent failed to adequately identify and investigate the risk
that the trust account had become dormant as a result of trust
transactions being incorrectly effected using bank accounts other
than the trust account.
The respondent was sentenced to a fine of R200,000, of which
R50,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 9 –
The respondent failed to respond to correspondence
from a client within a reasonable time.
The respondent was sentenced to a fine of R20,000, of which
R10,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 10 –
The respondent was appointed as a business rescue
practitioner of a company, but the respondent failed to ensure
compliance with relevant legal requirements before accepting the
appointment. In addition, the respondent failed to act diligently on
certain aspects in this engagement.
The respondent was sentenced to a fine of R60,000, of which
R40,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order, publication in
general terms and, in addition, a R25,000 suspended portion of a
previous fine has now been imposed.
Matter 11 –
The respondent acted as the executor of an estate. The
respondent failed to submit the required reports to the Master of the
High Court within the time frame required by the Administration of
Estates Act.
The respondent was sentenced to a fine of R40,000, of which
R20,000 has been suspended for three years on condition that
the respondent is not found guilty of unprofessional conduct
committed during the period of suspension, with an order of R5,000
contribution to costs and publication in general terms.
Matter 12 –
The respondent failed to ensure that the client was
informed on a timely basis of a decision by SARS to reject an
objection lodged with SARS. The delay in informing the client
caused penalties and interest to be levied by SARS. In addition, the
respondent failed to appropriately respond to the client on issues
raised by the client.
The respondent was sentenced to a fine of R20,000, of which
R10,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 13 –
The respondent was responsible for conducting the
audit of a company for the 2013 financial year. The consolidated
annual financial statements of the company for the 2014 financial
year contained a number of material restatements relating to prior
year errors. The respondent had failed to detect theses errors during
the course of the audit relating to the 2013 financial year, and was
found to have issued an unqualified audit opinion in circumstances
where it was inappropriate to do so. Furthermore, the respondent
failed to detect that disclosure of certain prior year errors in the
consolidated annual financial statements of the company for the
2014 financial year was inadequate.
The respondent was sentenced to a fine of R200,000, of which
R60,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 14 –
The respondent’s firm was repeatedly tardy in dealing
with its own failure to ensure that a permanent employee was made
a member of the firm’s retirement fund, including failing to ensure
that orders of the Pension Fund Adjudicator were carried out in the
period prescribed.
The respondent was sentenced to a fine of R20,000, of which
R10,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 15 –
The respondent failed to file documentation with the
CIPC timeously. The respondent failed to respond to communication
from his client and also to requests for information made to him by
his client’s attorneys. In addition, the respondent failed to respond
within a reasonable time to correspondence and requests from the
IRBA.
The respondent was sentenced to a fine of R40,000, of which
R30,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, an order of R5,000 contribution
towards costs and publication in general terms.
Matter 16 –
The matter arose from a referral by the Inspections
Department. The respondent’s firm published a technical directive
that would allow audit teams to breach Section 90(2) of the
Companies Act. As CEO of the firm, the respondent had ultimate
responsibility for directives issued by the firm.
The respondent was sentenced to a fine of R100,000, of which
R50,000 has been suspended for three years on condition that the
respondent is not found guilty of unprofessional conduct committed
during the period of suspension, no costs order and publication in
general terms.
Matter 17 –
The matter arose from a referral by the Inspections
Department. The respondent failed to obtain sufficient appropriate
audit evidence relating to the selected engagement as there were
numerous instances of noncompliance with International Standards
on Auditing.