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INVESTIGATIONS
INVESTIGATING COMMITTEE
The Investigating Committee met once during this period and
referred 15 matters to the Disciplinary Advisory Committee.
DISCIPLINARY ADVISORY COMMITTEE
The Disciplinary Advisory Committee met twice during this period
and concluded on 27 matters.
Decisions not to charge
Two matters in terms of Disciplinary Rule 3.5.1.1 – the respondent
is not guilty of improper conduct.
One matter in terms of Disciplinary Rule 3.5.1.2 – there is a
reasonable explanation for the respondent’s conduct.
Two matters in terms of Disciplinary Rule 3.5.1.4 – there are no
reasonable prospects of succeeding with a charge of improper
conduct against the respondent.
Decisions to charge and matters finalised by consent
order
Twenty-one matters were finalised by consent order.
Matter 1
The respondent issued unprofessional communication to an audit
client and failed to respond in a timely manner to a request from a
successor audit firm of the client.
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
relating to work done during the period of suspension, no cost
order and publication by the IRBA in general terms.
Matter 2
The respondent failed to obtain sufficient and appropriate audit
evidence to verify certain balances and made reference to outdated
financial reporting frameworks and auditing standards in the audit
reports.
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
relating to work done during the period of suspension, no cost
order and publication by the IRBA in general terms. In addition, the
respondent must arrange and ensure that external training on the
current accounting and auditing standards is attended by him and
his audit staff within 60 days of the imposition of the sentence, and
must provide evidence of compliance to this to the IRBA.
Matter 3
The respondent failed to complywith the independence requirements
of the code in relation to non-assurance services provided to audit
clients. Furthermore, the respondent signed an audit report without
disclosing his name.
The respondent was sentenced to a fine of R100 000, of which
R50 000 has been suspended for five years upon re-registration on
condition that the respondent is not found guilty of unprofessional
conduct relating to work done during the period of suspension, no
cost order and publication by the IRBA in general terms.
Matter 4
The respondent initially issued an unqualified opinion, but
subsequently withdrew and reissued the audit report. The reissued
financial statements contained corrections pertaining to related
party disclosures and recognition of an item of property plant
and equipment and a long term liability. The respondent initially
performed inadequate audit procedures to identify that these
misstatements existed in the financial statements.
The respondent was sentenced to a fine of R50 000, of which
R25 000 has been suspended for three years on condition that
the respondent is not found guilty of unprofessional conduct
relating to work done during the period of suspension, no cost
order and publication by the IRBA in general terms.
Matter 5
The respondent failed to identify that the audit team did not
document work done on a significant audit judgement area included
in the report to those charged with governance. The misstatement
identified was material and resulted in a prior period error adjustment
in the financial statements.
The respondent was sentenced to a fine of R150 000, of which
R100 000 has been suspended for three years on condition that
the respondent is not found guilty of unprofessional conduct relating
to work done during the period of suspension, no cost order and
publication by the IRBA in general terms.
Matter 6
The respondent was a quality review partner on an engagement
and failed to identify that the audit team did not document work
done on a significant audit judgement area included in the report
to those charged with governance. The misstatement identified
was material and resulted in a prior period error adjustment in the
financial statements.
The respondent was sentenced to a fine of R150 000, of which
R100 000 has been suspended for three years on condition that
the respondent is not found guilty of unprofessional conduct relating
to work done during the period of suspension, no cost order and
publication by the IRBA in general terms.
Matter 7
The respondent noted various material matters in the report to
those charged with governance; however, the audit working papers
do not evidence how these matters were addressed in arriving at
the audit opinion expressed. Furthermore, the respondent acted
unprofessionally regarding the payment of a disputed portion of the
audit fees.
The respondent was sentenced to a fine of R100 000, of which
R60 000 has been suspended for five years on condition that the
Issue 42 | April - June 2018
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