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IOD: Guidelines to Audit Committees on Reportable Irregularities
- 09 June 2025
- Regulatory Compliance and Legislation
- South African Accounting Academy
Summary:
The Institute of Directors (IOD) has drawn attention to a document published on Guidelines to Audit Committees on Reportable Irregularities and the impact on the Audit Committee.
Article:
There is no requirement for the auditor to discuss a Reportable Irregularity with the audit committee prior to sending the report to the IRBA and it is vital that the audit committee understands the process of reporting. The consequences of Reportable Irregularities are that the audit report will be modified and unresolved Reportable Irregularities will be reported to “any appropriate regulator”.
The audit committee should consider implementing the following measures and/or ensuring that the following actions have been taken:
- Education regarding Reportable Irregularities
- Engagement contracts
- The reporting process
- Finalising the audit and the financial statements
Audit committees should keep in mind that the overall responsibility for the reporting of irregularities is that of the registered auditor and that the board of directors are ultimately responsible for making representations and taking corrective action, assisted by the audit committee.
Appendix A contains more details on section 45 of the APA.
The original position paper was issued in March 2005.
Click here to download the 6-page document:
Relevance to Auditors, Independent Reviewers & Accountants:
- As a practitioner, you may need to advise your clients, who have audit committees, on their functions and what is expected of them by investors.
- The audit committee has wide ranging roles and bears significant responsibility in supporting the Board.
- Audit committees should be aware of guidance issued by regulators, such as the IOD.
Relevance to Your Clients:
- The audit committee has wide ranging roles and bears significant responsibility in supporting the Board.
- Audit committees should be aware of guidance issued by regulators, such as the IOD.