Tag: Independent Regulatory Board for Auditors (IRBA)

We have released its 2024 Public Inspections Report, highlighting important strides in audit quality across South African audit firms inspected. The report also presents the key deficiencies, themes and trends observed during the year’s inspections cycle.

The governance ecosystem is touted to give accountability, transparency, fairness and responsibility as the pillars on which corporate governance is built to all stakeholders and sanction or root out perverse conduct in an appropriate and balanced manner. This should keep the equilibrium of all stakeholders’ rights and obligations in check.

In the 2013 Report on the Observance of Standards and Codes (ROSC Report), one of the recommendations provided was the need for South Africa to consider enacting a law that would allow audit firms to organise as limited liability partnerships (LLPs).

South Africa's Minister of Finance increased the maximum fines that the Independent Regulatory Board for Auditors can impose on auditors for misconduct.

In the current economic environment, there are various reasons why small and medium enterprises (SMEs) would require an audit of their annual financial statements. An audit could be required by law in terms of the Companies Act of South Africa, the company’s memorandum of incorporation, the bank during an application for funding, potential investors, or the regulators in the industry in which that SME operates (or any other legislation).

The Tax Court has again confirmed that there is no safety for taxpayers in relying on their auditor’s views to justify a tax position adopted. To the contrary, where a taxpayer infers that their tax position is justified 'because my auditor said so', it can actually result in a larger tax penalty.

Since 2017, the auditing profession has been plagued by high-profile corporate failures that have implicated auditors. As a result of state capture revelations, share price collapses, and corruption allegations, the South African public continues to question how audit can be relied upon to protect its investments.

In October 2020, we focused on ethics and delivered a series of webinars to discuss the ethical challenges currently facing the chartered accountancy and auditing professions and come up with solutions to these challenges. During a particular focus on ethics in the public sector, I shared that the professional body has noted an increase in the number of member complaints about intimidation threats.

Considering the high profile scandals that have dominated news headlines in the last few years, from VBS Mutual Bank to Eskom, it does not seem unreasonable to say that South Africa may have a corporate fraud problem. What’s more, the accounting irregularities that led to shareholders being defrauded and losing significant shareholder value, may have been entirely preventable if the internal auditors had been more empowered, protected and held to the same level of accountability as external auditors, via appropriate regulation of the internal audit industry.

A plethora of corporate governance codes has been written across the world, and in spite of their recommendations which inter alia seek to protect stakeholder interests and shareholder value, many governance failures and organisational collapses continue seemingly unabated.