Oversight updates will improve public confidence in auditors
The Organisation Undoing Tax Abuse (OUTA) supports the proposed amendments to the Auditing Profession Act 26 of 2005, which we hope will strengthen the fight against corruption and help restore public confidence in the auditing profession.
The Financial Matters Amendment Bill was introduced in Parliament in January and was discussed in public hearings last week. It includes amendments to five laws. The amendments to the Auditing Profession Act are aimed at:
• Strengthening the independence of auditors, especially when dealing with corrupt clients;
• Broadening the investigative powers of the oversight body, the Independent Regulatory Board for Auditors (IRBA);
• Introducing deterrents to undesirable conduct by auditors.
OUTA also supports the principle of Mandatory Audit Firm Rotation as one solution for strengthening auditor independence and enhancing the credibility of financial reporting.
Auditors play an important function in society and we should never have to second guess their reports on a company’s financial situation. It is extremely worrying when businesses as large as Steinhoff and VBS collapse, due to financial misrepresentation, or corrupt relationships flourish over years in our state-owned entities and between businesses like Bosasa and government departments.
OUTA hopes that these amendments will help tackle the corruption that permeates the relationships between the private and public sector.
“The fact that institutions with considerable powers have been deliberately sabotaged and that the guilty have been allowed to get away with serious transgressions is unacceptable,” says Wayne Duvenage, OUTA’s CEO.
“These problems placed a spotlight on the audit profession, raising questions about how such major transgressions were possible. Accordingly, the audit industry should have no problem with adopting these amendments, if auditors intend to carry out their work in the manner expected of them.”
OUTA trusts that the stakeholders’ inputs in the public comment process will be considered and that once these new powers are bestowed on the IRBA, they will be used constructively and without favour or political influence.