MPs want audit board Irba to consult more widely on rotation rules
Parliament’s standing committee on finance is urging the Independent Regulatory Board for Auditors (Irba) to consult more widely on its decision to introduce mandatory audit firm rotation from April 2023.
The committee would express its view in a letter to Irba, chairman Yunus Carrim said during a committee meeting on Tuesday.
The committee recently held public hearings on mandatory audit firm rotation.
Business is strongly opposed to the Irba decision, which it believes has not been properly researched and which it argues will undermine the powers of shareholders and audit committees.
Business believes the mandatory rotation of auditors, rather than audit firms, will address Irba’s concerns about strengthening auditor independence.
Irba CEO Bernard Agulhas, however, insists Irba consulted for a year before it took the decision for mandatory audit firm rotation and said the question for discussion was not the decision itself but the method of its implementation.
Neither Treasury nor the finance committee has the power to overrule a decision of the Irba board, he pointed out in a recent interview.
Carrim said the committee was also concerned about the connection between mandatory audit firm rotation and the transformation of the accounting sector, which is dominated by four big players.
Further hearings on the Irba decision will be held by the committee on March 17.
Carrim said committee members would like to hear more before taking a final position on the matter.
"For now it seems that mandatory audit firm rotation is correct but the debate is too polarised and we feel that Irba should consult more effectively before finalising its decisions," Carrim said.