Powers of subpoena, search and seizure will boost auditing regulator's reach - CEO | Fin24
 
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Powers of subpoena, search and seizure will boost auditing regulator's reach - CEO

Feb 11 2020 05:00
Jan Cronje

Finance Minister Tito Mboweni is set to introduce a draft amendment bill to Parliament to give auditing watchdog the Independent Regulatory Board for Auditors increased powers when undertaking investigations, among other changes. 

The draft bill seeks to amend sections of the Auditing Profession Act of 2005. 

IRBA, which falls under Treasury, is a independent statutory regulator that develops and maintains SA's auditing standards for public accountancy. It registers local auditors and conducts disciplinary and investigative probes, among other functions.  

The proposed amendment bill will broaden the range of the tools available to the board when conducting investigations, including by granting it the power to issue a warrant and "enter and search premises and to subpoena persons with information required for an investigation or disciplinary process". The bill will also provide for a duty to disclose information.

IRBA CEO, Bernard Agulhas, says the board is pleased with the draft bill.

Higher sanctions

"The complexity of investigations, and the capacity constraints under which IRBA operates, has been frustrated by delays in obtaining evidence on the matters from the parties concerned," he told Fin24 via email. 

"The increased powers of subpoena, search and seizure, will assist the IRBA in obtaining the evidence necessary for investigations. It is critical that the IRBA has the necessary tools, access and ability to perform its investigations so that it can respond to alleged misconduct in the most efficient and timeous manner."

Agulhas noted that, in addition to increasing the board's investigative powers, the draft amendment bill would strengthen the independence of auditors, improve the efficiency of IRBA's disciplinary processes, and "introduce deterrents to undesirable behaviour by auditors by proposing higher sanctions".

"These measures will contribute significantly to public protection," he said. 

Both IRBA and the South African Institute of Chartered Accountants (South Africa's professional body for auditors, which is accredited by IRBA) have been conducting hearings into the role auditors played in the state capture era. 

In March 2019, the auditor responsible for auditing Gupta-linked company Linkway Trading was struck from IRBA's register after being found guilty on six charges of improper conduct. 

Disgraced former Eskom and Transnet Chief Financial Officer Anoj Singh, meanwhile, is undergoing a disciplinary hearing by SAICA. In February last year the institute stripped the former chairperson of the VBS board, Tshifhiwa Matodzi, of his registration.

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