A bite to match its bark

In a move designed to give the Independent Regulatoryboard for

Auditors (Irba) more teeth, finance minister Tito Mboweni tabled the Auditing Profession Amendment Bill in February. If passed, it will strengthen the regulator’s investigative powers, including the ability to subpoena evidence and conduct search-and-seizure operations.

The proposals were initially met with alarm, as they appeared to give Irba unlimited powers to enter premises and secure documents, raising concerns around constitutionality. But these powers will onlybe allowed if other efforts to obtain evidence have been unsuccessful.

“This will enable the regulator to take stronger action against audit firms which maybe withholding evidence critical to the investigation process,” says Irba.

The newbill also contains provisions to simplify disciplinary processes, speed up the finalisation of hearings and reduce costs.

On the punitive side, Irba’s maximum fine of R200,000 —c onsidered a laughing stock in the industry, given the fees charged by auditors —w ill be removed, and the finance minister will be granted the right to set the upper limit “commensurate to the level of improper conduct”.

The bill must still be debated in parliament, and no date has yet been set.

Mboweni on Friday also gazetted the names of Irba’s new board, which includes three reappointments and seven new additions. The yw ill nowgo through a verification and clearance check.

Once constituted, the newboard has its workcut out for it. Mboweni has tasked the regulator with reviewing the decision to appoint Jenitha John as CEO when Bernard Agulhas’s contract expired at the end of June.

John’s appointment has come under fire from the DA and the Organisation Undoing Tax Abuse, given that her term as the director in charge of Tongaat Hulett’s audit committee coincided with a huge overstatement of revenue and assets that has been called a “mini-steinhoff”.