A regulatory framework governing accountants in South Africa appears to be on the cards, following reports of a meeting between the Independent Regulatory Body for Auditors (Irba) and the UK’s Financial Reporting Council (FRC) at the beginning of this month.
The discussions come in the wake of a report on the observance of standards and codes, to be published by the World Bank, which recommends the regulation of South African accountants. The auditing profession has been regulated under the Auditing Profession Act since 2006.
Nicolaas van Wyk, CEO of the Southern African Institute for Business Accountants (Saiba), said in a statement on Friday that this was a "significant and extremely important development" for everyone performing the work of an accountant.
- He warned that there needed to be careful consideration of the model that would be implemented to regulate accountants, as the last thing South Africa needed was more red tape. Accountants were already affected by tax legislation, as they were involved in the financial supply chain, Mr van Wyk said.
- An accountant could be charged if he/she intentionally, or due to negligence, helped a business avoid paying tax, or unduly postpone the payment of a tax.
- Mr van Wyk said the country should guard against the "wholesale adoption" of standards applicable to the UK model.
- In the UK only chartered accounting bodies are recognised for the purposes of the FRC regulations. Saiba is the only professional accounting body that recognised the qualifications offered by universities of technology.
- Any future model of regulations should recognise the qualifications of all South African accredited universities.
- Saiba, initially established in 1987 as the Southern African Institute for Management Accountants, represents accountants and finance professionals, and its members are allowed to accept appointments as independent reviewers in terms of the Companies Act.
- The institute has also signed a memorandum of understanding with the South African Institute of Tax Practitioners that allows its members to accept appointments as tax practitioners.
- The institute’s CEO Stiaan Klue said earlier this month that the Tax Administration Act requires that any person providing tax advice, or assisting with the completion of a tax return, be registered with the South African Revenue Service and an accredited regulating body.
- Auditors body Irba CEO Bernard Agulhas said in an interview with The Accountant, published last week, that he met the UK’s FRC "to discuss how a future regulation of the accounting profession could be articulated in South Africa, should such regulation go ahead". He said the meeting allowed him to understand the FRC model and share it with the Treasury, which would make recommendations to the finance minister.