|Johannesburg, Wednesday, August 31, 2016 - Following on from its initial notice of intent to withdraw from the regulation of the Broad-Based Black Economic Empowerment (B-BBEE) verification industry in March this year, the Independent Regulatory Board for Auditors (IRBA), issued a reminder in August to B-BBEE Approved Registered auditors (BARs) that the 30 September 2016 deadline for it to handover the regulation and accreditation for B-BBEE is fast approaching.
Therefore, the South African National Accreditation System (SANAS) will remain as the only national accreditation body offering this service until such time as the Department of Trade and Industry (DTI) defines a new regulatory structure for the B-BBEE verification industry.
The IRBA has been accrediting registered auditors offering B-BBEE assurance services since 2011. SANAS has accredited verification agencies, other than registered auditors, since 2007 and will now provide the same for registered auditors.
Says Bernard Agulhas, CEO of the IRBA: “In our engagements with the DTI to finalise our withdrawal from this role, the DTI has indicated it will issue communication to clarify the new regulatory structure and the requirements for compliance as a B-BBEE verification professional in due course. In the interim, the department has also assured us that there is a clear process for auditors who wish to become accredited by SANAS.
“We, therefore, see no reason to extend our involvement beyond the initial withdrawal deadline that was agreed. We are confident that the SANAS process will enable Registered Auditors to register and continue to offer B-BBEE verification services to their clients.
“We have communicated with our stakeholders during the transition period and have issued instructions on the way to proceed, which is available on our website.”
The DTI is the custodian of the B-BBEE policy and the IRBA is established as a regulator under the Ministry of Finance to regulate the audit profession. Its involvement in B-BBEE verification pertained specifically to the service provided by its registered auditors to their clients, and to support government’s objectives of economic transformation.
Continues Agulhas: “As the objective, scope, work effort and reporting of an engagement performed under SANASs/DTIs verification procedures are significantly different to the requirements of our South African Standard on Assurance Engagements (SASAE) 3502 (Revised), Assurance Engagements on Broad-Based Black Economic Empowerment (B-BBEE) Verification Certificates, we are encouraging BARs to commence their registration now.
“While it makes no sense for two regulators to operate two different processes of accrediting verification professionals for B-BBEE assurance engagements when the requirements and scope are quite different, we do not stand in the way of BARs who wish to continue offering this service and we therefore urge them to undertake the necessary training to be able to meet the SANAS requirements.”
SASAE 3502 (Revised) will be withdrawn in due course.
With respect to assurance engagements that have been entered into prior to 30 September 2016, a transitional period of three (3) months (to 31 December 2016) will be allowed for the sign off of the verification certificates for these engagements.
Based on the agreed strategy with the DTI to establish a new regulator, the IRBA has not registered any new BARS since 1 April 2016. B-BBEE annual fees were discontinued for the 2016/2017 year.
More about the IRBA:
The IRBA is a public protection statutory body established to protect the financial interests of the public by ensuring registered auditors and their firms deliver services of the highest quality. It upholds audit firm independence to ensure that audit quality is such that it enhances the accuracy and credibility of financial performance reporting. In this way, the IRBA has an important role to play in building the reputation of South Africa as an investment market for both local and global investors and driving economic growth for the country.
As an internationally recognised regulator of the auditing profession and other assurance services relevant to the South African environment, it has been recognised by the World Economic Forum as the top independent audit regulator worldwide for six consecutive years for the strength of its audit controls and standards. The IRBA also registers suitably qualified accountants as auditors, who must adhere to the highest ethics standards, and promotes the auditing profession through the effective regulation of assurance conducted in accordance with internationally recognised standards and processes.