Issue 54 | April-June 2021 7 LEGAL DISCIPLINARY COMMITTEE Matters Referred for Disciplinary Hearings Currently, there are 19 open cases that have been referred to the Legal Department for disciplinary hearings. The various matters are at different stages of the process. Matters Heard by the Committee During the period under review, two matters were heard and finalised by the Disciplinary Committee. A brief outline of the matters is set out hereunder. IRBA vs Given Tumelo Ratau Mr Given Tumelo Ratau (the respondent) was charged with nine charges of improper conduct, following an investigation by the IRBA. At all relevant times, the respondent was a registered auditor (RA) and the sole proprietor of Lide Consultants and CAs. The charges against the respondent emanated from a complaint received from the Law Society of the Northern Province, in relation to audit work performed in respect of attorney trust accounts. Charges 1-6 thus concerned a number of audit failures emanating from the respondent’s audit of attorney trust accounts during 2015 and 2016. Specifically, the charges related to the respondent’s failure to perform or document audit procedures in relation to a confirmation of a trust position; trust shortages and trust account debits; an interest calculation; the timeous payment of interest to the law society; payments from a trust account to a business account; services offered by the attorney; journal reallocations; and compliance with the Rules of the Law Society relating to the maintenance of accounting records and trust accounts. Charges 7-9 related to post facto modifications on working papers; failure to ensure that his engagement team had adequate competency, capabilities, capacity and supervision to perform audit work; and the failure to fully declare the assurance work performed. The IRBA contended that the respondent’s conduct, as outline in the charges, contravened Rules 2.1; 2.4; 2.5; 2.6; 2.7 and 2.17 of the Rules Regarding Improper Conduct. The respondent pleaded guilty to charges 1-6 and denied guilt in respect of charges 7-9. On 12 and 13 October 2020, a disciplinary hearing was convened before the Disciplinary Committee for the determination of charges 7-9, in respect of which the respondent had denied guilt. At the hearing, the parties led evidence in support of their respective cases through witnesses and documents. The essence of the respondent’s defence on charges 7-9 was as follows: a) The working papers were not modified post facto. The modification date was changed by the transfer of the papers from a laptop to a USB. In any event, International Standard on Auditing (ISA) 230 allowed for modifications. b) Notwithstanding the number of audit engagements he took up in the relevant years, his full-time employment as CFO and the fact that he was the only RA in his firm at the time, he had a competent team and exercised adequate supervision on weekends as after hours; and c) The failure to declare was an error occasioned by the failure in his systems at the time of declaration. Having considered the evidence presented, the committee found the respondent guilty on the three charges in respect of which evidence was heard. In relation to charge 7, the committee found that the evidence led by the IRBA was not meaningfully challenged by the respondent. While the committee noted the respondent’s defence to the effect that ISA 230 allowed for modification, it found that such a defence was not plausible because the respondent had failed to comply with paragraph 16 of ISA 230 in as far as he did not record the modifications, reasons thereof and details relating to when and by whom the modifications were effected. With regard to charge 8, the committee found that the respondent was overstretched and understaffed; and that he did not adequately supervise his staff, due to his immense workload and that of his staff. Further, it was impossible, under the circumstances, for him to be able to properly provide guidance, leadership and quality control over the audit process of the attorney trust accounts, as per the requirements of ISA 220. In relation to charge 9, the committee found that the evidence showed that the respondent submitted documents that were incomplete; he under-declared his audit engagements by 49 engagements; he failed to conduct additional procedures to test for completeness; and he failed to present any objective evidence that his computer system had crashed or why he could not provide the correct numbers from the original documents in his possession. The committee further held that this charge was aggravated by the lack of immediate and corrective action taken by the respondent from the moment he became aware of the omission. In light of the guilty finding by the committee, a sanction hearing was convened on 29 March 2021, wherein the parties were given an opportunity to submit evidence in mitigation and aggravation of the sanction. The respondent elected not to participate in the hearing and thus no evidence in mitigation of the charges was presented to the committee. Notwithstanding this, the IRBA led the evidence of three witnesses, to testify in aggravation of the charges, and provided closing arguments in respect of aggravating submissions.