11
LEGAL c o n t .
The respondent was sentenced to a fine of R75,000, of which
R25,000 was suspended on conditions, with publication in
general terms only.
Two matters
were
referred back
to the Investigating
Committee for reconsideration.
Decision to charge and matter referred to the Disciplinary
Committee
Three
matters – of which
one
consists of three respondents –
were referred to the Disciplinary Committee for a disciplinary
hearing.
Erratum
In the last issue we reported on a consent order case as
follows:
“
In one
matter the inspection revealed that the respondent
had issued an unqualified audit opinion in relation to the
annual financial statements of his client, notwithstanding that
those annual financial statements departed from the IFRS for
SMEs (which was the financial reporting framework applied in
preparing the said annual financial statements): property plant
and equipment was carried in the balance sheet at a revalued
amount, while IFRS for SMEs requires this asset class to be
carried at cost less accumulated depreciation and impairment
losses. The respondent was sentenced to a fine of R50,000, of
which R25,000 was suspended on conditions, and publication
in general terms only.”
In fact, the amount of the fine was R20,000, of which R10,000
was suspended on conditions.
The committee sat twice during this period.
On
20, 21 and 22April 2015
it heard a matter in Stellenbosch.
At the end of the three days the pro forma complainant closed
his case and the matter was remanded to 9, 10, 11 and 13
November 2015 for the respondent’s case.
On
26 June 2015
the committee resumed to hear arguments
DISCIPLINARYCOMMITTEE
annual financial statements, the auditor's report should have
beenmodified.
The first respondent was evasive and failed to satisfactorily
answer the IRBA's request for information, furthermore stating
that the second respondent signed off the auditor's report.
While the second respondent may have signed the auditor's
report, it was the first respondent who met with the client and
responded to the request by Parliament in the form of an
affidavit (despite the fact that the request was addressed to the
second respondent). The second respondent issued an
undated, unmodified auditor's report, but had reported a
reportable irregularity to the Board pertaining to the same
reporting period of the client. The reportable irregularity was
unrelated to the corrupt dealings and only came 18 months
after the enquiry fromParliament.
Both respondents were sentenced to a fine of R100,000 each,
with no suspension, a contribution to costs of R5,000 each and
publication in general terms only.
In
one
matter the complainant was a trustee of a sectional title
body corporate. The body corporate appointed a managing
agent company whose owner embezzled cash from the body
corporate and, allegedly, several other body corporates.
The respondent was the auditor of the body corporate and the
audit of the annual financial statements of the body corporate
was not entirely complete to the fullest extent. Had the
respondent adhered fully to auditing standards, it was likely
that the embezzlement would have been detected.
The respondent was sentenced to a fine of R50,000, of which
R25,000 was suspended on conditions, with publication in
general terms only.
In
one
matter the respondent and complainant were partners
in a three-person audit firm. The firm rented office space froma
close corporation and this space is owned by the spouses of
the three partners. The property had been sold and
distributions were made to the members. The respondent
acted as accounting officer of the close corporation, and was
dilatory in producing the annual financial statements of the
close corporation for reporting periods, delayed the payment
and made an error in calculating the taxes on the final
distribution.
Issue 31 July - September 2015
