Cape Town – Finance Minister Enoch Godongwana has approved an increase in the maximum fines that can be imposed by the Independent Regulatory Board for Auditors (IRBA) on auditors and auditing firms in South Africa for misconduct.
The new fines, which were gazetted on June 15, are based on IRBA’s recommendations and take into account feedback received on proposed fine increases published in September 2022, BusinessDay reported.
These increased fines represent a significant raise in the maximum monetary penalties that Irba can levy on auditors and audit firms who admit guilt or are found guilty of misconduct in disciplinary hearings, the report said.
According to News24, the current maximum fine that IRBA can impose is a flat R200 000 across the board.
The report said that the country has, over the past few years, experienced high-profile scandals in which auditing firms have been fingered for shoddy work at best.
These include the collapse of Steinhoff International and Tongaat Hulett in the wake of fraud allegedly perpetrated by the respective firms’ management teams, the report said.
While IRBA accepted the minister’s proposal, it clarified that the new fines were maximum limits and that non-monetary sanctions could also be applied.
Law firm Webber Wentzel noted that the increased fines would have a significant impact on auditors and their firms, but raised concerns regarding the ambiguity surrounding the implementation date and the principle of penal law.
Follow African Insider on Facebook, Twitter and Instagram
Picture: Getty Images
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
