IRBA outlines plans to restore confidence in the roles of auditors and the regulator
CEO Bernard Agulhas talks about IRBA's strategies to rebuild trust after a clean audit review.
The Independent Regulatory Board for Auditors’ (IRBA) annual report was recently tabled in parliament, achieving its tenth consecutive clean audit.
IRBA CEO Bernard Agulhas said:
“We are pleased that we have continued to maintain a clean audit opinion on our financial statements, more so given the most recent audit outcomes reported by the Auditor-General, where it highlighted that irregular expenditure in government and state-owned entities (SOEs) has increased and that almost three in four departments and public entities simply did not comply with key legislation. These outcomes indicate a continuing need for improvement of governance, controls and financial discipline in the public sector.”
In IRBA’s annual report, Agulhas said that the current negative state of the profession brought on by unprofessional conduct of a few forced the collapse of trust in the auditing profession and cannot continue unabated. “As a regulator, we have to work even harder to restore confidence and get this profession to being one of the most trusted and respected again.”
IRBA had set out strategies to restore confidence in the public interest role of auditors and the regulator.
“We recognise that now is not the time to try to restore the status quo but to listen to the market no only about what is expected from auditors but also from the audit product, and then adapt to address challenges presented by the new landscape,” Agulhas said.
He said that, to respond to the market and close the expectation gap IRBA will have to rely on understanding what needs to change, how it should change and what the regulator can do to help enable that change. “For those reasons, we continue to employ a stakeholder-centred approach in responding to the market,” he said.
Mandatory Audit Firm Rotation is one of the initiatives mandated by the IRBA to strengthen auditor independence from their clients, which will go a long way in restoring trust in the auditing profession. During 2017, the IRBA began tracking the number of JSE Ltd main board listed companies that had voluntarily rotated audit firms ahead of the effective date, and the IRBA expects that by 2021 most listed companies would have complied well ahead of the effective date.
Read more: 21 percent of JSE-listed companies have rotated their auditors ahead of MAFR deadline