1 / 59

PARLIAMENTARY BRIEFING

DRAFT AUDITING PROFESSION BILL. PARLIAMENTARY BRIEFING. National Treasury: Republic of South Africa 16 August 2005. Contents. Background Overview of the DAPB. Background. Background. Corporate Failures Independence of the Regulatory Board Government funding – Independence

lansmith
Télécharger la présentation

PARLIAMENTARY BRIEFING

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. DRAFT AUDITING PROFESSION BILL PARLIAMENTARY BRIEFING National Treasury: Republic of South Africa 16 August 2005 1

  2. Contents • Background • Overview of the DAPB 2

  3. Background 3

  4. Background • Corporate Failures • Independence of the Regulatory Board • Government funding – Independence • Complexities in corporates • Companies Act 4

  5. Overview of the DABP 5

  6. DABP Overview • Object of the Bill • Independent Regulatory Board for Auditors (IRBA) • Accreditation and Registration • Conduct and Liability of Registered Auditors • Accountability of Registered Auditors • Offences • General Matters 6

  7. Objects of the Act • Protection of public interest • Provide for establishment of Independent Regulatory Board • Prescribe ethical & auditing standards • Provide for competency requirements • Provide for procedures for disciplinary action in respect of proper conduct 7

  8. INDEPENDENT REGULATORY BOARD 8

  9. Independent Regulatory Board • Establishment and status • Functions • Powers • Governance • Committees • Funding and financial management • National government oversight and executive authority 9

  10. Establishment and Status • Juristic person • Exercise functions ito of this Act • Other laws • Constitution • Ministerial directives 10

  11. Functions • General functions • Accreditation of professional bodies • Registration of auditors • Charging of fees • Education, Training and Professional Development 11

  12. General Functions • Promote the integrity of the profession • Investigate improper conduct & conduct disciplinary hearing • Impose sanctions for transgressions/ improper conduct • Protect public interest • Prescribe standards for qualifications, competence, ethics and conduct of auditors • Encourage education icw, & research into matters affecting the profession • Participate in international professional activities 12

  13. Accreditation of professional bodies • Prescribe minimum requirements for accreditation • Consider & decide on applications • Prescribe period for the validity of accreditation • Keep register of accredited professional bodies • Terminate accreditation of professional bodies 13

  14. Registration of auditors • Prescribe minimum requirements for registration • Consider & decide on applications • Prescribe period for the validity of registration • Keep register of registered auditors • Terminate registration of auditors 14

  15. Fees • Prescribe: • Accreditation & registration fees • Annual fees or part thereof • Examination fees ito section 38 • Fees iro education fund • Inspection or practice review fees • Fees for services rendered • Due dates for all the fees 15

  16. Education, Training & Development (1) • Conditionally or unconditionally recognise educational institution iro educational qualifications & programs • Recognise or withdraw recognition for professional body iro FQE per section 38 • Prescribe requirements & conditions for continued education, training & professional development • Prescribe period for training and form of training contracts 16

  17. Education, Training & Development (2) • Recognise or withdraw recognition for firms as training officers • Reciprocal international professional recognition • Advise or consult relevant bodies wrt education, training & development of RAs • Approve & register training contracts • May establish an education fund 17

  18. Powers • IRBA may • Determine staff & related issues • Determine reimbursable fees for the board • Collect fees & invest funds • Borrow money ito PFMA • Grant bursaries or loans • IRBA may prescribe rules regarding • Any matter as per this Act • Any matter allowing it to function effectively 18

  19. Governance • Appointment of the Regulatory Board • Term of office • Who does not qualify? • Chairperson and Deputy Chairperson • Meetings • Decisions • Duties of members • CEO • Delegations 19

  20. Appointment of IRBA • Appoint not more than 10 non-executive members • Must be suitable qualified & experienced • Transparency & representativity • RA should not be more than 40% • Appoint alternate members 20

  21. Term of board membership • Not more than two years • Reappoint may not exceed two consecutive terms • Minister may override – but may only twice • Minister may terminate period of office early 21

  22. Who does not qualify? • Any person who is: • A Non RSA citizen and non residents; • An Unrehabilitated insolvent; • Convicted of offence; • Removed from office of trust due to improper conduct; • Guilty of improper conduct ito this Act 22

  23. Membership ceases when: • A person: • is disqualified ito the Act; • resigns; • Is of an unsound mind or mentally disordered; • Is absent for more than two consecutive mtgs; • Ceases to be permanently resident 23

  24. Chairperson & Deputy • IRBA must appoint a chairperson • Hold office for two years from date of appointment • Deputy assumes all powers of the chairperson in his/her absence • Board members may elect an acting chair 24

  25. Meetings • At least twice a year • Chairperson may convene a special meeting • At least three board members may request a special meeting in writing • All board members have one vote • Chairperson has a casting vote 25

  26. Duties of Members • Provide effective, transparent, accountable and coherent corporate governance • Provide effective oversight • Comply with all applicable legislation • Communicate openly and promptly with the Minister • Deal with Minister in good faith • Act in accordance with the code of conduct for board members 26

  27. Delegations • IRBA may delegate its powers other than prescribing rules • Assign any employee to perform any of its duties • Delegation is subject to limitations by the IRBA • May authorise sub-delegation • Delegation does not divest board of responsibility • IRBA may confirm, vary or revoke decision taken by committee, CEO or member 27

  28. Committees • IRBA must appoint the ff permanent committees: • Ethics committee; • Standard setting committee; • Education, training and professional development committee; • Investigating committee; and • Disciplinary committee • IRBA must consider transparency & representativity 28

  29. Ethics committee • Ethics committee shall be composed of; • Three registered auditors; • Three persons representing users of audit services; • One person representing a stock exchange; and • One advocate or an attorney with at least ten years experience • Must assist IRBA in determining improper conduct • Advise RAs on matters of professional ethics 29

  30. Standard setting committee • This committee shall be composed of; • Five registered auditors; • One person with experience of business; • The Auditor-General or his/her nominee; • The CEO of FSB or his/her nominee; • An experienced university lecturer in auditing; • A stock exchange nominee; • The commissioner of SARS or his/her nominee; and • The registrar of banks • Develop, maintain, adopt, issue or prescribe auditing pronouncements 30

  31. Disciplinary committees • A disciplinary committee must: • Be chaired by a judge or senior advocate; • Consist of the a majority of non-RAs; • Consist of other suitably qualified persons not associated with auditing profession 31

  32. Funding & Financial Management • Funding • Collection of prescribed fees; • Other monies that may accrue to the Board; and • Annual appropriations. • Annual Budgets and strategic plan ito PFMA • Financial management must be in accordance with PFMA 32

  33. National government oversight and executive authority • Powers of the Minister • Ministerial representatives • Investigations and directives • Information 33

  34. Powers of the Minister • Executive authority • Ensure the IRBA complies with the PFMA and other legislation • Ensure IRBA is managed responsibly and transparently • Establish clear channels of communication • Monitor and review performance 34

  35. Ministerial rep • Official from National Treasury • Act as a participating observer • May call or convene a meeting • Must represent the Minister faithfully • Act in accordance with Minister’s instruction 35

  36. Investigations and directives • Minister may instruct the Board to undertake specific functions • Instruct the Board to stop or desist from acting against the interest of the auditing profession • May investigate the affairs of the Board at any time 36

  37. Requirements for Accreditation • Compliance with prescribed requirements of professional development • Ensure continued professional development for members • Disciplinary framework • Financially & operationally viable • Transparency and representivity 37

  38. Termination of Accreditation • Accreditation lapses automatically if: • PB ceases to exist • Fails to pay prescribed fees • IRBA must cancel Accreditation: • On non-compliance with requirements or • Suspend accreditation to protect public interest or auditing profession 38

  39. Effect of termination of ACC • Termination does not affect registration of RAs • RAs must satisfy the Board of suitability to continue registration 39

  40. Registration of Auditors • Must comply with prescribed education, training and competency requirements for a RA; • Serve under a registered training contract for the prescribed period; • Pass prescribed final qualifying examinations; • Have access to continued professional development; • Fit to practice the profession; and • Has the necessary competence to practice. 40

  41. Registration of Auditors • Board may not register an individual: • Was removed from an office of trust due misconduct; • Was convicted of fraud, theft, forgery or an offence ito PRECCA; • Is of unsound mind; and • Disqualified under this Act. 41

  42. Termination of Registration • Board must cancel registration: • Disqualification subsequent to registration; • If registration was made in error; and • Individual is guilty of improper conduct. • Board may cancel registration: • Sequestration or compromise with creditors • Fails to satisfy CPD requirements after ceasing to be a member of a professional body. 42

  43. Registration of Firms • Only firms that may be registered are: - • Partnerships where all partners are themselves registered auditors • Sole proprietor owned by an RA; • Companies if; • Registered ito of Companies Act; and • Only RA are shareholders; 43

  44. Conduct and liability of registered auditors • Practice • Compliance with rules • Information to be furnished • General services in relation to audit services • Duty to report irregularities • Limitation to liability 44

  45. Practice • Only registered auditors may practice or call themselves auditors; • A person not registered as RA may not; • Perform audit services; • Pretend to be, or in any manner hold out as an auditor; • Use any name per subsection (1) or any misleading name; • Make people believe he/she is an audtitor. 45

  46. General obligations • A RA may not issue an unqualified opinion unless; • He/she carried out the audit free from restrictions; • He/she is satisfied of the existence all assets and liabilities reported; • Proper accounting records are kept by the client; • He/she obtained all information, vouchers necessary for the conclusion of the audit; and • Satisfied as to the fairness or truth or correctness of the financial statements 46

  47. Duty to report on irregularities • RA satisfied or has reason to believe a reportable irregularity is taking place must report to the Board without delay • Must notify the board of the entity with 3 days in writing • Within 30 days discuss with management, allow them representations iro the report and send another report to IRBA. • The IRBA must notify the appropriate regulator in writing • To conduct investigations an RA must have to all info from whatever source • Reporting when an entity is sequestrated or liquidated 47

  48. Limitation of liability • A RA does not incur liability unless he/she is negligent • A RA incur liability if: • He/she knew the report would be used by the client to induce third party act or refrain to act in some way or • That the party would rely on the opinion • Represented subsequent to the opinion being issued to the third party that the opinion was correct • Having performed audit services is not sufficient proof for liability • A RA may incur a liability if he/she fails to report a reportable irregularity 48

  49. Accountability of registered auditors • Inspections • Investigation of charge of improper conduct • Charge of improper conduct • Disciplinary hearing • Proceedings after the hearing 49

  50. Inspections/ practice review • IRBA or its appointee may conduct practice reviews • At annually for public interest company audits • IRBA may recover costs of the review from an RA • An RA must supply all info required by the IRBA or its appointee • An RA submitting info in good faith may not be criminally liable for producing the info 50

More Related