15 Sept 2010

The Companies Act, 2008 was assented to by the then President Motlanthe on 9 April 2009. The Draft Regulations to the Companies Act have been issued for comment and will be finalised by the Department of Trade and Industry (DTI) before the Companies Act becomes effective.

On 19 July 2010 the DTI issued a Draft Companies Amendment Bill, 2010, which includes amendments to the Companies Act, 2008. DTI has invited interested parties to present their comments on the Bill during Parliamentary Hearings to be scheduled at a date to be determined. The Draft Regulations will remain pending until the Act and Amendments thereto have been finalised.

To date, DTI has expected the Act and Regulations to become effective on 1 October 2010. We are unable to confirm whether this will be achieved, but will advise Registered Auditors as soon as we have received a confirmed date from DTI.

We appreciate the uncertainty and challenges around the final outcome of the Regulations, which are also faced by IRBA, but continue to engage with DTI and the relevant parties to expedite the process and propose strategies which must ultimately protect the public interest.

The Corporate Legislation has been a top priority for IRBA over the past few years, and although it might not be immediately obvious to registered auditors, we have been, and continue to interact with DTI to provide comments and recommendations on how to effectively implement the new legislation. Our comments are on public record.

During the previous year road shows, I had mentioned that we should be in a position to provide feedback to auditors on the final outcome of the Companies Act and Regulations during the 2010 road shows. Due to the legislation not having been finalised, and the uncertainty in respect of implementation dates, we decided to postpone the current year's road shows to the middle of 2011. We are hopeful that we will have the necessary information by then to discuss the impact of the legislation on auditors and the profession. We are also confident that the outcome will be in the best interest of the country.

Please do not hesitate to contact me should you wish to discuss this communication with me or require further information.

Yours sincerely

Bernard Peter Agulhas
Chief Executive Officer

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