Around the world regulators are taking a firmer stance against audit firms when there is an audit failure. Disciplinary fines are increasing across the globe, and high profile cases attract significant press attention.
During this process the IRBA has monitored high profile cases around the world in order to ensure that the IRBA’s disciplinary process is aligned to international benchmarks. It became clear that the IRBA penalties were too lenient in comparison to those of international regulators, specifically as it related to the amounts of fines and whether or not publishing details of findings in cases would be in general or specific terms.
The IRBA is currently limited in this regard by the Auditing Profession Act 26 of 2005 which in Section 51(3)(ii) states that the IRBA may “impose on the registered auditor a fine not exceeding the amount calculated according to the ratio for five year’s imprisonment prescribed in terms of the Adjustment of Fines Act 101 of 1991.
While Section 51(5) says that the “Regulatory Board may, if it deems appropriate, publish the finding and sanction imposed in terms of subsection (3)” in practice the disciplinary has handed down sanctions which usually provide for publication of findings and penalties only in general terms.
Table of international fines and links to the stories