Auditing Profession Amendment Bill released

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Juanita Steenekamp | Project Director | Governance and Non-IFRS Reporting | SAICA Standards Division | mail me |


The South African Institute of Chartered Accountants (SAICA) welcomes the gazetting of the Auditing Profession Amendment Bill (APA Bill), and commits to supporting initiatives aimed at improving the regulatory environment in order to restore trust in South African capital markets. SAICA is looking forward to making a positive contribution in this amendment process. 

The APA Bill was introduced into the National Assembly on 10 February 2020, as Bill 2 of 2020, just over a year after the APA Bill was initially introduced as part of the Financial Matters Amendment Bill (FMA Bill) on 16 January 2019. Unfortunately, the FMA Bill could not be finalised under the previous Parliament and the APA Bill had to be moved to the 6th Parliament. The APA Bill, barring a few small changes, still includes the search and seizure provisions, the power to subpoena in the investigation process, the simplification of the disciplinary hearing process and the increase of sanctions as was contained in the previous Bill related to the mandate of the Independent Regulator Board for Auditor (the Regulatory Board).

The Auditing Profession Act, No. 26 of 2005, currently prescribes that a registered auditor must, at the request of the Regulatory Board produce any information as requested by the Regulatory Board and to not do so would be classified as an offence. These powers are now enhanced with the powers to enter and search premises. The powers to enter and search premises as set out in the APA Bill will allow an official of the Regulatory Board to enter any premises with prior consent, but without any consent if there is a warrant for the purposes of conducting a search.

In SAICA’s view, the enter and search powers as included in the Bill appear to be quite extreme when compared with other legislation dealing with search and seizure. This includes the Property Practitioners Act, 2019, Financial Sector Regulation Act, 2017, the Financial Intelligence Centre Act, 2011, and the Tax Administration Act, 2011, where these Acts allow for search and seizure as an exceptional remedy of last resort; provisions are included concerning the official that will be conducting the search and seizure; and the search and seizure powers are balanced with protection for the subject which includes an appeal process as well as a sanction that is set out in the legislation.

The APA Bill introduced proposed changes where sanctions and fines may be increased and SAICA welcomes this development.

Freeman Nomvalo, SAICA CEO, says that: “some of the SAICA submissions made at the previous public hearings seem to have not been considered. SAICA will be submitting its comments for consideration in the APA Bill in order to support the IRBA in its drive to ensure greater accountability by the auditing profession in the public interest”.


 



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