Johannesburg, Tuesday, March 16, 2021 – The Independent Regulatory Board for Auditors (IRBA) has committed to enhance audit quality and address gaps in the auditing profession and the broader financial reporting ecosystem - with a specific focus on areas that impact audit quality. This is in terms of its recently reviewed and refocussed 5-year strategy, which has been adopted by the Caretaker Board in February this year.
The auditing profession has faced many challenges recently, following several high-profile corporate and audit failures, and these have led to the integrity and quality of auditors’ work being questioned both locally and globally. There is however still broad consensus that auditors remain a key stakeholder in protecting the interests of the investing public and are an important contributor in attracting much needed investments to the country.
Our country desperately needs to attract investment to boost its economy, which leads to private sector growth that creates jobs and generates revenue for the fiscus. Local and foreign investment is underpinned by sound financial reporting and high quality audited financial information. Everyone - employees, investors and the state - need a high level of assurance that the financial information published by companies reflect their true financial performance and position.
Says Nagy: “We have just completed a review of our five-year strategy, which has been approved by the Caretaker Board and submitted to National Treasury in February. It takes into account COVID-19 and the corporate and audit failures which have continued to plague corporate South Africa. Our focus will be on audit quality, sustainability and relevance of the regulator and the profession, as well as comprehensive stakeholder engagement with the view to promote broader reforms.
“We cannot rebuild trust in financial reporting and regain confidence in the financial markets, until we have improved audit quality and taken significant steps to transform and innovate the financial reporting environment, the audit profession and the audit regulator.
“Consequently, where reform is within our mandate, we aim to apply further strategic measures to improve confidence in audits and the profession, and we will commence this process by seeking some quick wins together with stakeholders, especially around improved audit quality, transparency and communication. Where gaps exist in the broader reporting environment that negatively impact audit quality, we will offer recommendations for improvements or policy changes, whether this may be with the support of our immediate stakeholders or with the assistance of National Treasury and Parliament.
“The IRBA is fully committed to returning to its restoring confidence projects and taking stock of what we have achieved since early 2018 and what more still needs to be achieved. Some significant projects that are well advanced are Mandatory Audit Firm Rotation (MAFR), Audit Quality Indicators (AQI) and the imminent promulgation of the Auditing Profession Amendment (APAA) bill which will give the IRBA strengthened powers of investigation, simplify disciplinary processes, increase sanctions and ensure we have a Board that is independent of the profession.
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.
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.