THE RELEVANCE OF CA(SA)’S

The CA(SA) designation has been considered a coveted profession.  Once you have qualified as a CA(SA), you hear of all the opportunities that are available in all kinds of industries all over the globe.

Becoming a CA(SA) is a long and tiresome journey.  Spending years studying every aspect of accounting needing a wheelbarrow to carry all your books, three gruelling years of being stretched to the absolute limit during your articles and two of the toughest exams known to man.  So, after all this work, our qualification is officially on the endangered species list along with lawyers and bankers. How did this happen?

Technology has been the biggest change in our field, with the creator of Bitcoin throwing us a blockchain-shaped loop (refer to the article Cryptocurrency (http://aslblog.asl.co.za/?p=2259) for a brief overview of what blockchain technology is).  Furthermore, IT developments have automated a substantial amount of accounting work, resulting in less audit work required in certain instances, therefore a smaller number of auditors and more IT knowledge being needed to test the systems.  The skillset required to perform audits has therefore adjusted along with technological changes.

Further problems for the CA(SA) designation is the recent ethical violations by SAICA members which have dominated the media and brought the profession into disrepute.

SAICA is currently working on a project to define the competencies that CA(SA)’s will need in the year 2025 in order to adjust the training programme as needed to ensure their members remain relevant.  SAICA is also currently reviewing the organisation and profession by specialist advisors to address any deficiencies in the constitution, governance and structure of SAICA to address the tarnished reputation of the industry.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

THE COMPULSORY ROTATION OF AUDITORS

Every public and state-owned company has to appoint an auditor and a company secretary.  However, in terms of section 92 of the Companies Act, 2008, the same individual is not allowed to serve as the auditor or designated auditor of a company for more than 5 consecutive financial years.

What does this mean for my company?

  • If an individual has served as the auditor or designated auditor of your company for 2 or more consecutive financial years, and then ceases the position, the individual may not be appointed again as the auditor or designated auditor of the company until after the expiry of at least two further financial years.
  • If your company has appointed 2 or more persons as joint auditors, you must manage the required rotation in a way that all of the joint auditors do not relinquish office in the same year.

Despite the strict requirements for public and state-owned companies, it is not compulsory for private or personal liability companies to appoint an auditor, unless the company is required to produce audited financial statements.

Is this for the better?

It is understood that the external audit function is an activity of public protection and provides credibility to financial statements and assurance to investors. However, auditor rotation could lead to additional costs to companies, as the new auditor would be required to perform additional procedures on the opening balances of their new client.

In some areas, it could also impact negatively on the availability of auditors, as some towns only have a limited number of registered auditors. Auditors practicing as sole practitioners will also be affected, and could lose long-term clients unless they bring in another registered auditor and expand their practice.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

THE COMPULSORY ROTATION OF AUDITORS

Every public and state-owned company has to appoint an auditor and a company secretary. However, in terms of section 92 of the Companies Act, 2008, the same individual is not allowed to serve as the auditor or designated auditor of a company for more than 5 consecutive financial years.

What does this mean for my company?

  1. If an individual has served as the auditor or designated auditor of your company for 2 or more consecutive financial years, and then ceases the position, the individual may not be appointed again as the auditor or designated auditor of the company until after the expiry of at least two further financial years.
  2. If your company has appointed 2 or more persons as joint auditors, you must manage the required rotation in a way that all of the joint auditors do not relinquish office in the same year.

Despite the strict requirements for public and state-owned companies, it is not compulsory for private or personal liability companies to appoint an auditor, unless the company is required to produce audited financial statements.

Is this for the better?

It is understood that the external audit function is an activity of public protection and provides credibility to financial statements and assurance to investors. However, auditor rotation could lead to additional costs to companies, as the new auditor would be required to perform additional procedures on the opening balances of their new client.

In some areas, it could also impact negatively on the availability of auditors, as some towns only have a limited number of registered auditors. Auditors practicing as sole practitioners will also be affected, and could lose long-term clients unless they bring in another registered auditor and expand their practice.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)