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Treasury backs search powers for auditors' regulator

Publish date: 15 February 2019
Issue Number: 58
Diary: CompliNEWS
Category: Legislation

Amendments to the law governing the auditing profession could give the regulator powers enjoyed by select law-enforcement agencies. As reported in Legalbrief Today, the Bill, which the National Treasury introduced to Parliament, had striking changes compared with the one published in August 2018. Business Day notes it is proposed to give the Independent Regulatory Board for Auditors (Irba) the power to enter and search premises when investigating auditors for improper conduct. In the first draft it was proposed only to give the Irba powers to subpoena any person with information required to complete an investigation. This, the Treasury said, was due to auditing firms not co-operating when the Irba investigates auditors. The new proposed amendment followed public consultation which started in 2018. Irba CEO Bernard Agulhas said the regulator experienced difficulties in gathering the evidence, audit files and correspondence it required for its investigations. ‘This led to the investigations being lengthy due to unnecessary delays,’ he said. Agulhas said it was the National Treasury that proposed giving the Irba power to search and seize evidence. He said the regulator requested only subpoena powers. Deloitte said it supported any effort to improve the regulatory and oversight framework. However, the auditing firm said in its submission that it raised issues of concern as the powers to search would affect not only auditors but third parties as well. ‘But it if it is believed that search and entry is needed we have made extensive recommendations to ensure a fair constitutional process,’ Deloitte said.

Full Business Day report

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