SAICA `not yet` in favour of MAFR, says more research is needed
The South African Institute of Chartered Accountants (SAICA) says that more research is needed before introduction of mandatory audit firm rotation could be considered.
Terence Nombembe (pictured), SAICA CEO, said in a recent report by SAICA on the issue of Mandatory Audit Firm Rotation (MAFR) that the introduction of MAFR in South Africa will have a "significant impact on the business environment" and that we are not yet ready for MAFR. He said:
"... We do not believe that robust, comprehensive and persuasive research has been conducted to support the decision on MAFR. As a result we believe the discussions around transitional arrangements are premature."
In the body of the report, SAICA said it believes that it is crucial for such a "significant decision to be based on robust, comprehensive research", as such research will be vital in ensuring that the perceived benefits are not outweighed by the unintended consequences.
In its conclusion the report said:
"It is not clear why MAFR should urgently be implemented as opposed to waiting to understand the impact that recent changes (such as the new auditor report and the inclusion of the period of tenure in auditor reports) have had... In our opinion, the discussion on transitional arrangements is premature and not in the best interests of the public and affected stakeholders. We urge the IRBA to allow more time for a detailed and thorough consultation process whether to implement MAFR."
View recent interviews and articles on MAFR by visiting our MAFR dossier.