Disciplinary powers to be strengthened for auditing regulators
Proposed amendments include increasing Irba’s oversight powers and an open-ended fine structure, decided by the finance minister
The Treasury is proposing legislative amendments to strengthen the disciplinary provisions of the Auditing Profession Act, and to increase the amount of the fine that can be imposed on a registered auditor found guilty of improper conduct.
The Treasury’s director of legislation Ailwei Mulaudzi briefed parliament’s finance committee on Tuesday on the amendments, which are contained in the Financial Matters Amendment Bill. The bill proposes amendments to a number of different acts.
The Auditing Profession Act currently empowers the disciplinary committee of the Independent Regulatory Board for Auditors (Irba) to impose a fine not exceeding the amount calculated according to the ratio for five years’ imprisonment prescribed by the Adjustment of Fines Act.
Currently this amounts to R200,000, which Mulaudzi said is an “inadequate deterrent”. Instead, the bill proposes empowering the finance minister to determine the maximum amount.
Irba board members will be prohibited, in terms of the bill, from sharing directly or indirectly in the profits of a registered auditor or candidate auditor; receiving payments from them; or conducting business with them.
Registered auditors and candidate auditors will also be prohibited from being appointed as members of the Irba board.
Mulaudzi said the aim of these provisions is to strengthen Irba’s independence and address conflicts of interest of board members.
“To address challenges faced by Irba during investigations into improper conduct by registered auditors the bill proposes empowering Irba to subpoena people with information required to complete its investigation,” he said.
Irba will be enabled to appoint as many members as it deems fit to its disciplinary committee to lessen the burden on the committee to deal with cases. For each disciplinary case, a panel must be appointed.
Irba will also be empowered to refer a matter against a registered auditor to an accredited professional body for investigation.