Amendments are proposed to the Auditing Profession Amendment Bill stipulating that the Independent Regulatory Board for Auditors (IRBA) must submit a regulatory strategy to the finance minister for approval within three months after the promulgation of the Auditing Profession Amendment Act.
National treasury revealed this in a briefing to the national council of provinces (NCOP) on the bill.
The national assembly passed the bill and sent it to the NCOP for concurrence in December 2020.
The bill was tabled in parliament in February 2020.
The bill aims to amend the Auditing Profession Act, 2005, so as to:
• insert a definition;
• strengthen the governance of the Regulatory Board;
• strengthen the investigating and disciplinary processes;
• provide for the power to enter and search premises and to subpoena persons with information required for an investigation or disciplinary process;
• provide for the power to issue a warrant for purposes of entering and searching of premises;
• provide for processes to be followed after an investigation;
• provide for sanctions in admission of guilt process and following a disciplinary hearing;
• provide for offences relating to investigation and disciplinary process;
• provide for the protection and sharing of information;
• provide for transitional measures; and
• provide for matters connected therewith.
The proposed legislation sets down how the investigating committee, disciplinary committee and subcommittees of the IRBA are to be constituted.
Detail is provided on powers to enter and search premises, warrants, process following investigation, disciplinary hearing and sanctions in admission of guilt process.
In order to strengthen the independence of the IRBA and address issues of conflict of interest by members of the IRBA, the proposed amendments prohibit registered auditors and candidate auditors from being appointed as members of the IRBA.
The proposed amendment also seeks to empower the investigating committee to authorise an official of the IRBA to enter and search premises or subpoena any person with information required to complete an investigation in order to address issues of non-cooperation by auditing firms during improper conduct investigations.
The IRBA will also be able to, if appropriate, refer a matter brought against a registered auditor to an accredited professional body for investigation.
The standing committee on finance adopted the bill with amendments.
During the briefing, treasury also pointed out that the approved regulatory strategy would also have to be published in the Gazette within six months of the date of promulgation.
Other responses to stakeholder input include proposal for minimum of three panel members supported; propose that disciplinary committee be chaired by retired judge or senior counsel; propose that chairperson of disciplinary panel be its legally qualified member; proposed amendment for details of referral of non-audit matters to be dealt with in IRBA’s rules and that referral must fall within constitution and rules of professional body; proposed amendments on search and seizure including qualification and certificate for person authorized to conduct search and seizure, enhanced protection and clarity on criteria for warrant; proposal that minister determines maximum fine on recommendation of Board and also publishes proposed maximum fine for public comment and proposal for sharing of information with professional bodies in respect of referral of non-audit matters.
Public hearings are scheduled for 9 February 2021.