IRBA Reportable Irregularities Report 2022/2023

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IRBA Reportable Irregularities Report 2022/2023

• 26 November 2024
• Auditing and Assurance
• South African Accounting Academy

Summary:

The Independent Regulatory Board for Auditors (IRBA) has published their first-ever Reportable Irregularities Report 2022/2023.

Article:

The Reportable Irregularities (RIs) process, as outlined in the Auditing Profession Act, as amended, is designed to empower registered auditors to challenge management and boards on irregularities uncovered during an independent audit of financial statements and ensure effective governance.

This Report aims to not only embolden registered auditors, but to provide stakeholders with comprehensive feedback on the nature of RIs reported over a specific period and the measures taken to address them.

Through this report, our goal is to enhance transparency and support co-ordinated regulatory efforts to effectively address identified irregularities. Therefore, auditors, audit committees, boards, investors and the public will find valuable insights into risk areas that necessitate increased scrutiny.

It is worth noting, though, that the irregularities auditors reported do not represent an exhaustive study of the degree to which corporate South Africa adheres to applicable laws and regulations and/or the risks of corporate failures. Nevertheless, they provide useful insights on developing trends and areas where increased levels of regulatory oversight might be required.

Contents:

• CEO's Foreword
• Definitions
• Legislative and Governance Framework
• Purpose and Limitation of the Report
• Overview of the Reportable Irregularity Process
• Analysis of the Reportable Irregularity Reports received
• Trends identified in Reportable Irregularity Reporting over the Past 5 Financial Years
• Concluding Remarks

As the regulator, the IRBA is committed to developing resources that support auditors in the identification and reporting of RIs and call on the relevant regulators to hold accountable those that committed these irregularities.

Access the IRBA Communiqué at https://www.irba.co.za/upload/51_%20RI%20Report.pdf

Click here to download the 32-page Irregularities Report:

https://www.irba.co.za/upload/IRBA%20RI%20Report%202022-2023.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The APA, which is regulated by the IRBA are pieces of legislation that Registered Auditors must comply with, and which you must assess compliance with – also in terms of our Code of Professional Conduct.  Where clients don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• As an auditor, you should be aware of the reporting and summary of the Reportable Irregularities reported to the IRBA.
• You also need to consider the latest publications by regulators, such as the IRBA, to keep abreast of changes and important information.

Relevance to Your Clients:

• Entities that must comply with the relevant legislation that is enforced by the IRBA, should be aware of the process and impact of Reportable Irregularities.
• Your clients also need to consider the latest publications by regulators, such as the IRBA, to keep abreast of changes and important information.

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