LEGAL
QUARTERLY REPORT FROM THE DIRECTOR: LEGAL
FOR THE PERIOD 1 OCTOBER 2014 TO 31 DECEMBER
2014
these working papers were not part of the original audit file at
the time the audit report was signed or the on-site inspection
was carried out. The practitioner has been registered with
IRBAsince 2007 but this appears to be the practitioner's first
inspection.
The practitioner was fined R25 000 on the first aspect, of
which R12 500 was suspended for three years on
conditions, and was fine R100 000 on the second aspect,
with no order as to costs and publication in general terms
only.
?
One matter
related to using knowledge obtained from an
erstwhile client to go into business (specialised recruitment)
in competition with the former client. There was no evidence
that this had been to the financial detriment of the erstwhile
client. The practitioner was no longer registered with the
IRBA.
The practitioner was fined R100 000, of which R50 000 was
suspended on conditions, together with costs of R5 000 and
publication in general terms only. However, due to the fact
that the practitioner was no longer registered with the IRBA,
imposition of the entire order was postponed until such time
as the practitioner re-registers with the IRBA.
?
One matter
related to improperly effecting changes to the
CIPC records in the circumstances of a family dispute
between a son on the one hand and the other son and
mother on the other hand. The family own property (that is let
for rental income), which is held chiefly through two
companies.
The complainant (Brother #1) lodged the complaint against
the respondent for colluding with Brother #2, and assisting
Brother #2 to effect changes to the CIPC records by
appointing Brother #2 as the sole director of the two entities
in place of himself, Brother #1. The Brother-#2-and-mother
team believe that the complainant has been grossly
mismanaging the properties and that they had to remove
him as director. The copy of the share register forwarded by
the complainant shows that their mother transferred her
shares to him in 2006, thus giving him the majority
shareholding. However, their mother disputes this.
The respondent acknowledges that he made the changes to
the CIPC records for changes in the directors and auditor on
the strength of the documents submitted to him by Brother
#2 and their mother, which comprised:-
?
Shareholders' resolutions for both entities signed by the
mother and Brother #2; and
InvestigatingCommittee
The Investigating Committee met twice during this period (7
October and 13 November 2014) and referred 24 individual
matters to the Disciplinary Advisory Committee with
recommendations.
DisciplinaryAdvisory Committee
The Disciplinary Advisory Committee met twice during this
period (27 October and 5 December 2014) and disposed of 17
matters, as follows.
Decisions not to charge
?
One
matter in terms of Disciplinary Rule 3.5.1.1 (the
respondent is not guilty of unprofessional conduct; this
includes the situation where the conduct in question might
be proved but even if proved does not constitute
unprofessional conduct);
?
Four
matters in terms of Disciplinary Rule 3.5.1.2 (the
respondent having given a reasonable explanation for the
conduct);
?
Three
matters in terms of Disciplinary Rule 3.5.1.4 (being
that there are no reasonable prospects of succeeding with a
charge of improper conduct against the respondent);
?
One
matter in terms of Disciplinary Rule 3.5.1.5 (being that
in all the circumstances, it is not appropriate to charge the
respondent with improper conduct).
Decision to charge andmatters finalised by consent order
Five matters were finalised with fines. One practitioner had
two cases against him that were handled simultaneously:
?
One
matter related to a referral from the Inspections
Department. The respondent continued to be non-compliant
with the auditing standards in that there was insufficient
documentation of audit evidence to support the opinions
expressed. Furthermore, there appeared to be indications
that the practitioner prepared working papers for the sole
purpose of responding to the inspection queries and that
11
Issue 28 October 2014 - March 2015
