IRBA's Power Play: Aiming for 'Super Regulator' Status Under the Guise of Public Interest?
The Independent Regulatory Board for Auditors (IRBA) in South Africa recently engaged the media to advocate for the independent regulation of accountants to close a "glaring gap" in the current self-regulatory framework. This call, highlighted by IRBA's CEO Imre Nagy, is fueled by international scrutiny, such as the Financial Action Task Force's grey listing of South Africa, and domestic scandals like Steinhoff's. IRBA is of the opinion that around 50,000 accountants in South Africa are not governed by specific legislation, IRBA suggests amending existing laws or forming a new body for stricter oversight, despite resistance from professional accounting bodies.
However, in South Africa, professional bodies for accountants are statutorily recognized under several pieces of legislation, including the National Qualifications Framework Act, the Tax Administration Act, and the Companies Act, designating them as controlling bodies for tax practitioners and accountancy organizations for assurance and non-assurance providers. In each case existing Qualifications Authorities (SAQA, QCTO) and Commissions (CIPC, SARS) are mandated by law to conduct oversight, monitoring and enforcement of professional bodies, reviewing how they qualify, develop, discipline and enforce performance standards on their members. This presents an existing comprehensive legislative framework questioning IRBA's proposal for additional regulation, suggesting that the IRBA doubts the ability of these Authorities and Commissions to implement existing regulations. The current system already mandates strict oversight and accountability, indicating a potentially redundant layer of regulation with IRBA's suggestion.
It's crucial to consider the specific roles and existing regulatory mechanisms like those of the JSE for CFOs in listed companies, financial conduct authorities and the FIC. The focus on regulating 50,000 accountants in practice, based on the Steinhoff scandal involving a CA-qualified CEO, may not directly address the root issues of financial misconduct. Direct engagement with professional bodies (instead of the Media) could offer a more nuanced approach to regulation, ensuring it targets actual gaps in oversight without unnecessary overlap. This perspective invites a broader discussion on refining the scope of proposed regulations to effectively enhance accountability within the profession. The profession is not self regulatory as evidenced by SARS, CIPC, SAQA and others.
Source: News24
Source: A history of the Accounting Profession in South Africa: LinkedIn Article by Nicolaas van Wyk