ROGUE independent auditors and auditing firms in South Africa will be facing hefty penalties of up to R25 million, which could put them out of business, if they are found guilty of improper conduct as the National Treasury tightens controls.
The Minister of Finance Enoch Godongwana yesterday gazetted the latest notice of maximum fines for registered auditors found guilty of improper conduct after the notice of maximum fines previously gazetted in June last year was withdrawn in January.
Following a 30-day comment period and having reviewed the written comments received by Treasury, the minister determined new maximum fines that may be imposed on registered auditors found guilty of improper conduct:
* R5m per charge, as the amount envisaged in Section 51(2) of the act, which may be imposed on an individual registered auditor who admits guilt as contemplated in section 49(4)(a) of the act.
* R15m per charge, as the amount envisaged in Section 51(2) of the act, which may be imposed on a firm of auditors that admits guilt as contemplated in Section 49(4)(a) of the act.
* R10m per charge, as the amount envisaged in Section 51B(3)(b) of the act, which may be imposed on an individual registered auditor who is charged and found guilty or if the registered auditor admits guilt to the charge.
* R25m per charge, as the amount envisaged in Section 51B(3)(b) of the act, which may be imposed on a firm of auditors that is charged and found guilty or if the firm admits guilt to the charge.
These maximum fines will be applicable to improper conduct committed from June 6, 2024, being the date of publication of gazette notice 4933.
Therefore, the notice does not apply retrospectively, and the maximum fines promulgated by the minister on June 15, 2023, will remain applicable for improper conduct committed between June 15 2023 and before June 6, 2024.
Treasury said a framework which will guide the implementation of the maximum fines in a proportional and scalable manner will be issued by the Independent Regulatory Board for Auditors in due course for public comment before adoption by the board. - BR Reporter