A bite to match its bark

Financial Mail - - COVER STORY -

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”.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.