South Africa retains pole position for auditing and reporting standards for seventh year in a row

Says Bernard Agulhas, CEO of the IRBA: “We are naturally delighted to be recognised again for this achievement. At the IRBA we take very seriously our role in upholding the highest standards and persisting with our commitment to promote and maintain consistent and sustainable high levels of audit quality.

“South Africa relies very much on external capital and one of the important components of creating an environment where foreign direct investment (FDI) can occur is a well-regulated and reliable capital market. This results in a reputable audit profession which provides potential investors and capital providers with reliable and credible financial information on which investment decisions can be made. Equally, public confidence in any profession depends on the quality and robustness of the oversight.”

This repeat recognition was published in the World Economic Forum’s Global Competitiveness Report issued on Wednesday (28 September). It comes despite other challenges currently faced by the country and provides investors and the public with the assurance that, while the financial pillars of a country remain solid, trust in financial markets remains possible.

Independence continues to be the cornerstone of the auditing profession, as it is a vital component of public and investor protection. Therefore, the IRBA issued a new rule in December 2015, which required all auditor's reports on Annual Financial Statements to disclose the number of years which the audit firm/sole practitioner has been the auditor of the entity (audit tenure), and took a further decision to introduce Mandatory Audit Firm Rotation (MAFR) to solidify the independence of auditors.

Through its representation and participation in international forums, such as the International Forum of Independent Audit Regulators (IFIAR), the International Auditing and Assurance Standards Board (IAASB) and the International Accounting Education Standards Board (IAESB), the IRBA stays abreast of issues affecting the profession globally in order to evaluate and assess their relevance and impact on the South African environment, and develop appropriate responses. Furthermore, the IRBA is recognised as a Competent Authority for auditing under the EU Commission regulations, which enables cooperation between audit regulators recognised by its EU Adequacy Assessment process.

Concludes Agulhas: “As a responsible regulator, the IRBA must take the necessary measures to protect investors while remaining aware of global developments. Our number one ranking for seven years in a row does not only demonstrate the international community’s confidence in our profession and oversight but also provides the necessary basis to stimulate much needed investment in our economy.”

Ends

More about the IRBA:

The IRBA is a public protection statutory body established to protect the financial interests of the public by ensuring registered auditors and their firms deliver services of the highest quality. It upholds audit firm independence to ensure that audit quality is such that it enhances the accuracy and credibility of financial performance reporting. In this way, the IRBA has an important role to play in building the reputation of South Africa as an investment market for both local and global investors and driving economic growth for the country.

As an internationally recognised regulator of the auditing profession and other assurance services relevant to the South African environment, it has been recognised by the World Economic Forum as the top independent audit regulator worldwide for six consecutive years for the strength of its audit controls and standards. The IRBA also registers suitably qualified accountants as auditors, who must adhere to the highest ethics standards, and promotes the auditing profession through the effective regulation of assurance conducted in accordance with internationally recognised standards and processes.