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Issue 35 | July-September 2016

12

INVESTIGATIONS c o n t .

Matter 8 –

The matter arose from a referral by the Law Society

of the Northern Provinces. The respondent carried out the audit

of a purportedly dormant attorneys’ trust account. However, the

respondent failed to adequately identify and investigate the risk

that the trust account had become dormant as a result of trust

transactions being incorrectly effected using bank accounts other

than the trust account.

The respondent was sentenced to a fine of R200,000, of which

R50,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 9 –

The respondent failed to respond to correspondence

from a client within a reasonable time.

The respondent was sentenced to a fine of R20,000, of which

R10,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 10 –

The respondent was appointed as a business rescue

practitioner of a company, but the respondent failed to ensure

compliance with relevant legal requirements before accepting the

appointment. In addition, the respondent failed to act diligently on

certain aspects in this engagement.

The respondent was sentenced to a fine of R60,000, of which

R40,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order, publication in

general terms and, in addition, a R25,000 suspended portion of a

previous fine has now been imposed.

Matter 11 –

The respondent acted as the executor of an estate. The

respondent failed to submit the required reports to the Master of the

High Court within the time frame required by the Administration of

Estates Act.

The respondent was sentenced to a fine of R40,000, of which

R20,000 has been suspended for three years on condition that

the respondent is not found guilty of unprofessional conduct

committed during the period of suspension, with an order of R5,000

contribution to costs and publication in general terms.

Matter 12 –

The respondent failed to ensure that the client was

informed on a timely basis of a decision by SARS to reject an

objection lodged with SARS. The delay in informing the client

caused penalties and interest to be levied by SARS. In addition, the

respondent failed to appropriately respond to the client on issues

raised by the client.

The respondent was sentenced to a fine of R20,000, of which

R10,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 13 –

The respondent was responsible for conducting the

audit of a company for the 2013 financial year. The consolidated

annual financial statements of the company for the 2014 financial

year contained a number of material restatements relating to prior

year errors. The respondent had failed to detect theses errors during

the course of the audit relating to the 2013 financial year, and was

found to have issued an unqualified audit opinion in circumstances

where it was inappropriate to do so. Furthermore, the respondent

failed to detect that disclosure of certain prior year errors in the

consolidated annual financial statements of the company for the

2014 financial year was inadequate.

The respondent was sentenced to a fine of R200,000, of which

R60,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 14 –

The respondent’s firm was repeatedly tardy in dealing

with its own failure to ensure that a permanent employee was made

a member of the firm’s retirement fund, including failing to ensure

that orders of the Pension Fund Adjudicator were carried out in the

period prescribed.

The respondent was sentenced to a fine of R20,000, of which

R10,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 15 –

The respondent failed to file documentation with the

CIPC timeously. The respondent failed to respond to communication

from his client and also to requests for information made to him by

his client’s attorneys. In addition, the respondent failed to respond

within a reasonable time to correspondence and requests from the

IRBA.

The respondent was sentenced to a fine of R40,000, of which

R30,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, an order of R5,000 contribution

towards costs and publication in general terms.

Matter 16 –

The matter arose from a referral by the Inspections

Department. The respondent’s firm published a technical directive

that would allow audit teams to breach Section 90(2) of the

Companies Act. As CEO of the firm, the respondent had ultimate

responsibility for directives issued by the firm.

The respondent was sentenced to a fine of R100,000, of which

R50,000 has been suspended for three years on condition that the

respondent is not found guilty of unprofessional conduct committed

during the period of suspension, no costs order and publication in

general terms.

Matter 17 –

The matter arose from a referral by the Inspections

Department. The respondent failed to obtain sufficient appropriate

audit evidence relating to the selected engagement as there were

numerous instances of noncompliance with International Standards

on Auditing.