Appointment to Committees in Terms of the Auditing Profession Act

Following the enactment of the Auditing Profession Act, the Independent Regulatory Board for Auditors (IRBA), previously known as the Public Accountants and Auditors Board (PAAB), established committees to assist it in the performance of its functions. It may at any time dissolve or reconstitute any such committee.

Independent Regulatory Board for Auditors (IRBA)

In terms of section 11 of the Auditing Profession Act, Act 26 of 2005, the Minister of Finance must appoint not more than 10 non-executive members to the Independent Regulatory Board for Auditors (IRBA).

The general functions of the IRBA are to:

take steps to promote the integrity of the auditing profession, including -
investigating alleged improper conduct;
conducting disciplinary hearings;
imposing sanctions for improper conduct; and
conducting practice reviews or inspections;

take steps it considers necessary to protect the public in their dealings with registered auditors;
prescribe the standards of professional competence, ethics and conduct of registered auditors;

encourage education in connection with, and research into, any matter affecting the auditing profession; and
prescribe auditing standards.

The Minister of Finance must appoint competent persons, including registered auditors, to effectively manage and guide the activities of the Regulatory Board, based on their knowledge and experience.

A member of the board appointed in terms of section 11 of the Act will hold office for a period not exceeding 2 years, and may be reappointed, but may not serve more than two consecutive terms of office.

Committee for Auditing Standards

The Auditing Profession Act requires, in terms of Sections 20 and 22, the IRBA to establish a Committee for Auditing Standards. This committee may consist of as many members as the IRBA considers necessary and if the IRBA does not designate a chairperson for a committee, the committee may elect a chairperson from among its members.

The Committee for Auditing Standards must consist of at least the following members:

Five registered auditors (section 22(1)(a))
One person with experience of business (section 22(1)(b))
An incumbent of the office of the Auditor-General, or person nominated by that incumbent (section 22(1)(c ))
An incumbent of the office of the Executive Officer of the Financial Services Board, or a person nominated by that incumbent (section 22(1)(d))
One person with experience in the teaching of auditing at a university recognised or established under the Higher Education Act (section 22(1)(e))
One person nominated by any stock exchange licensed under the Securities Services Act (section 22(1)(f))
The Commissioner of the South African Revenue Service established in terms of the South African Revenue Services Act, or a person nominated by the Commissioner (section 22(1)(g))
An incumbent of the office of the Registrar of Banks, or a person nominated by that incumbent (section 22(1)(h)).

Functions of the Committee

The functions of the committee are to assist the IRBA to:

Develop, maintain, adopt, issue or prescribe auditing pronouncements;
Consider international developments and influence the nature of international pronouncements; and
Promote and ensure the relevance of auditing pronouncements

The committee is required to meet at least four times per annum.

Committee members will be paid an honorarium, which is to be determined by the Minister of Finance.

Committee for Auditor Ethics

The Auditing Profession Act requires, in terms of section 20 and 21, the IRBA to establish a Committee for Auditor Ethics. This Committee may consist of as many members as the IRBA considers necessary and if the IRBA does not designate a chairperson for this committee, the committee may elect a chairperson from amongst its members.

The Committee for Auditor Ethics must consist of at least the following members:

Three Registered Auditors (section 21(1)(a))
Three persons representing users of audits (section 21(1)(b))
One person representing an exchange which is the holder of a stock exchange licence issued under the Securities Services Act (section 21(1)(c ))
One advocate or attorney with at least 10 years experience in the practice of law (section 21(1)(d)).

Functions of the Committee

The functions of the committee are to assist the IRBA to:

Determine what constitutes improper conduct by Registered Auditors by developing rules and guidelines for professional ethics, including a Code of Professional Conduct;
Interact on any other matters relating to its functions and powers with professional bodies and any other body or organ of state with an interest in the auditing profession; and
Provide advice to Registered Auditors on matters of professional ethics and conduct.

The committee is required to meet at least four times per annum.

Committee members will be paid an honorarium, which is to be determined by the Minister of Finance.

Disciplinary Committee

In terms of sections 20 and 24, the Auditing Profession Act requires the IRBA to establish a Disciplinary Committee. This Committee may consist of as many members as the IRBA considers necessary. Section 24(2)(a) stipulates that the committee must be chaired by a retired judge or senior advocate.

In addition, sections 24(2)(b) and (c) stipulate that the minority of committee members must be Registered Auditors. The balance of members must be suitably qualified persons.

Function of the Committee

The function of the committee is to hear cases against Registered Auditors who have been referred for a hearing by the IRBA.

The committee is required to meet at least four times a year. In reality it can be expected to meet approximately 12 times a year.

Committee members will be paid an honorarium, which is to be determined by the Minister of Finance.

Education Training and Professional Development Committee

In terms of section 22 (2) (c) of the Auditing Profession Act, Act 26 of 2005, the Independent Regulatory Board for Auditors (IRBA) must establish an Education, Training and Professional Development Committee.

The functions of the committee are to assist the IRBA to:

Formulate accreditation requirements for professional bodies, recommend accreditation of professional bodies and monitor the accredited professional bodies;
Formulate training requirements;
Determine competency requirements in order to register as a Registered Auditor and assessment (examination) of the competency requirements;
Determine the nature and extent of Continued Education, Training and Professional Development
Undertake research in matters relating to professional education, training and assessments.

The committee is required to meet at least 4 times a year.

The committee must consist of persons with experience and knowledge of the education and training of Registered Auditors.

Inspection Committee

In terms of section 20(2), the Auditing Profession Act requires the IRBA to establish an Inspection Committee.

This Committee must consist of 50% Registered Auditors and 50% non-registered auditors.

The committee is required to meet at least 4 times a year.

Committee members will be paid an honorarium, which is to be determined by the Minister of Finance.