IRBA Newsletter Issue 50

Issue 50 | April - June 2020 9 LEGAL DISCIPLINARY COMMITTEE Overview of Matters Referred for Disciplinary Hearings Following the finalisation of three matters, 19 open cases have been referred to the Legal Department for disciplinary hearings. The graphics below outline the nature and status of all matters referred for hearings. Closed Matters During the period under review, three matters that were previously referred for disciplinary hearings, as a result of failed consent orders, were closed. This came about following the respondents’ subsequent acceptance of consent orders and the Disciplinary Advisory Committee’s agreement to rescind its prior decisions to refer such matters for disciplinary hearings. Matter 1 The respondent failed to inform the client and the client’s successor accountant of notifications received from the South African Revenue Service (SARS) regarding the submission of supporting documentation. In addition, the respondent failed to respond to the notification received from SARS. 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 improper 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 identify material errors in the going concern notes in the financial statements during the performance of the audit for two years. The respondent was sentenced to a fine of R60 000, of which R30 000 has been suspended for three years, on condition that the respondent is not found guilty of improper conduct relating to work done during the period of suspension; no cost order; and publication by the IRBA in general terms. Matter 3 The respondent, being the audit firm, entered into an arrangement with a third party in terms of which the audit firm was appointed as the auditor of shelf companies registered by the third party. The audit firm had no control over its subsequent resignation as auditor for these companies. In addition, the audit firm had no procedures in place to identify all the companies to which it was appointed as auditor. 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 improper conduct relating to work done during the period of suspension; no cost order; and publication by the IRBA in general terms. Matters Heard by the Committee African Bank Following the adjournment in December 2019 of the merits hearing relating to the conduct of the previous auditors of African Bank, the committee reconvened on the 8th and 9th of June 2020 to hear