Home Accounting and Auditing IRBA issues R2m in fines, shames some auditors

IRBA issues R2m in fines, shames some auditors

Source: Fin24. Author: Justin Brown

279
0

(Fin24, Justin Brown) The Independent Regulatory Board for Auditors (IRBA) handed out R2 million in fines this week to 21 auditors that contravened its professional standards, code of conduct and the law.

IRBA, for the first time, named and shamed four auditors, all repeat offenders.

However, IRBA, which regulates 4 000 local auditors, in a newsletter kept the names of 17 auditors hidden or referred to them as “the respondent”.

Of the R2 million in fines, R1.81 million was for new offences, of which R990 000 was suspended, while R200 000 related to the imposition of suspended fines.

The body said it would publish the findings, as well as the names of auditors and firms, involved in any contraventions related to “public interest entity matters”.

However, IRBA has said it would make exceptions regarding non-public interest matters and would publish the findings and names of auditors and firms involved in contraventions in which the auditor was a repeat offender and the findings led to disciplinary hearings.

Alphabet Phaka was fined R100 000, of which R50 000 was suspended for three years, and he was also fined R50 000 related to a suspended fine.

Phaka was the auditor of an attorneys trust account and failed to modify the assurance report issued in relation to both the late submission of the audit report to the Law Society and the non-payment by his client of all relevant interest in the Fidelity Fund, said IRBA.

Roger Reece was another auditor of an attorneys trust account. He failed to obtain sufficient appropriate evidence to support his audit opinion.

He was sentenced to a fine of R150 000, of which R75 000 was suspended for five years and he was also fined R20 000 related to a suspended fine.

Hayden du Preez failed to notify IRBA of a reportable irregularity that he became aware of in October 2015 in relation to his audit client’s failure to prepare annual financial statements over a number of years.

He was sentenced to a fine of R50 000, of which R25 000 was suspended for five years. He also received a further R100 000 suspended fine for another matter.

Deon van Schalkwyk failed to carry out his mandate in terms of tax work required by his client, despite numerous requests by the client to do so.

“He further failed to respond to requests for information from the new accountant and to numerous requests from the IRBA in relation to this complaint,” IRBA said.

He was fined R80 000, of which R40 000 was suspended for five years. He also was fined R30 000 related to a suspended fine.

These fines come at a time when major auditing companies such as KPMG, Deloitte and PwC are being scrutinised over alleged controversial auditing practices.

Click here to read the full article.