‘Complex’ IRBA rules stifle new auditors
THE interview with the Independent Regulatory Board for Auditors CEO, “Signing off on a more equitable distribution” (November 27), refers.
Bernard Agulhas has not been involved in an audit practice for more than 10 years, yet he claims to know of all the challenges that face our profession. He is selective in his assessment of the auditing profession, which is ironic considering that he is the CEO of the regulator of a profession that is held in high regard.
He failed to mention that the JSE requires all auditors of JSE-listed companies to be accredited with the JSE. One of the JSE’s requirements is that every auditor of a JSE-listed company must be “reviewed and accredited” by the IRBA before the JSE will allow them to sign off on the accounts of a JSE-listed company.
This “additional accreditation” is obviously a vote of no confidence in the IRBA’s normal review process despite its ranking as the best auditor regulator in the whole wide world.
I have been informed that a number of black auditors are not being accredited by the IRBA for signing off on a JSElisted company because of minor differences of opinion between the IRBA’s reviewers and some of the big-four firms.
Maybe the IRBA should give us an indication when last it certified an auditor (black or white) to sign off on JSE-listed companies. Furthermore, it should indicate the timelines between the last accreditation and the previous one, and the reason for the delay.
The IRBA appears to have difficulty working with other entities or state departments. A case in point is its foray into BEE certification. About three years ago, it started to accredit members of the IRBA to issue BEE certificates. Earlier this year, it unilaterally suspended that programme with six months’ notice. No explanation was given to members who had to undergo a six-month course at great expense (both monetary and in time) and invested a lot of resources in setting up BEE certification businesses.
It is ingenious of the CEO to blame the complexity of the audit profession on regulations, as the IRBA is the source of these complex regulations. In 2013 there were 4 306 registered auditors; by 2016 they had grown to 4 359 — a grand total of 53 new auditors in three years.
This is out of a total pool of more than 36 000 CAs.
The IRBA’s strategic focus is to protect the financial interest of the public. This is apparently achieved by regulating auditors. The logical deduction would then be that the public needs to be protected from auditors.
Mr Agulhas bemoans the pace of transformation in the profession but it admits, and I quote from its annual report: “Most of the candidates that resigned at this level were CAs (SA) and employment equity candidates. These employees represent scarce skills within the financial field and are paid higher salaries and premiums by other employers. The IRBA is not in a position to compete with these salary expectations or the benefits paid to these candidates by other employers.”
I can assure him that they are not recruited by audit firms as they cannot compete, either.
Considering the risks and all the regulations, it is hardly surprising that black CAs are not interested in becoming registered auditors, and, at this pace, it is only a question of time before white middle-aged men also give up on auditing. — Name withheld for fear of victimisation, by e-mail