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I NVEST I GAT I ONS

Fifteenmatters were finalised by consent order.

Matter 1

– The respondent was aware, prior to signing the

modified audit opinions for two companies in the same group,

of significant subsequent events in both companies which

management had failed to disclose in the respective financial

statements. In addition, the respondent failed to document

considerations for concluding on the classification of a current

loan as a non-current loan in both companies. Accordingly, the

financial statements did not provide the classifications

necessary to achieve fair presentation.

With respect to another company in the group, the respondent

was aware, prior to signing the unmodified audit opinion, of

significant subsequent events which management had failed

to disclose in the financial statements. In addition, the financial

statements did not in all material respects comply with the

requirements of IAS 24. Accordingly, the respondent's audit

opinion was inappropriate.

The respondent was sentenced to a fine of R150,000, of which

R37,500 has been suspended for three years on condition that

the respondent is not found guilty of unprofessional conduct

committed during the period of suspension, costs order of

R5,000 and publication will not include the respondent's

name.

Matter 2

– The respondent issued an unmodified limited

assurance report on the pro forma financial information in a

client's prospectus without performing adequate procedures

and obtaining sufficient appropriate evidence to substantiate

the conclusion in the report.

The respondent issued an unmodified reporting accountant's

report on the profit forecast and capital growth in a client's

prospectus without performing adequate procedures and

obtaining sufficient appropriate evidence to substantiate the

conclusion in the report.

In the audit of a client, there was a significant fair value

adjustment of a loan book and the respondent did not

document sufficient appropriate evidence to conclude

thereon. In addition, the respondent did not detect a material

error in the calculation of the client's deferred tax. There were

also a number of disclosure issues that the respondent had not

identified.

With effect from November 2015, the Legal Department was

split into two separate departments – Legal and

Investigations. As a result, the Investigating Committee and

Disciplinary Advisory Committee reports now reside with the

Investigations Department.

As stated in the December 2015

IRBA News

, due to the early

publication of that issue the matters considered by the

committees between October 2015 and December 2015 will

appear together with matters from the first quarter of 2016.

This report therefore covers the period October 2015 to March

2016.

The Investigating Committee met four times during this period

and referred 71 matters to the Disciplinary Advisory

Committee with recommendations.

The Disciplinary Advisory Committee met three times during

this period and concluded on 48matters as follows:

Decisions not to charge

Fifteen matters in terms of Disciplinary Rule 3.5.1.1 – the

respondents were not guilty of improper conduct.

Two matters in terms of Disciplinary Rule 3.5.1.2 – there were

reasonable explanations for the respondents' conduct.

Four matters in terms of Disciplinary Rule 3.5.1.3 – the

conduct of which respondents may be guilty were of negligible

nature or consequence.

Six matters in terms of Disciplinary Rule 3.5.1.4 – there were

no reasonable prospects of succeeding with charges of

improper conduct against the respondents.

Three matters in terms of Disciplinary Rule 3.5.1.5 – in all the

circumstances it was not appropriate to charge the

respondents with improper conduct.

Decisions to charge and matters finalised by consent

order

InvestigatingCommittee

DisciplinaryAdvisory Committee

1 2

Issue 33 January - March 2016