South Africa’s accounting and auditing
regulators are at odds over draft changes to the Companies Act that
would see small businesses exempt from audit.
The proposed Companies Act, due to be
implemented in the fourth quarter of this year, will abolish the
mandatory audit requirement for SMEs and replace it with the less
onerous independent review.
Audits must be conducted by registered
auditors, while any independent professional accountant will be
able to conduct a review.
The South African Institute of Chartered
Accountants (SAICA) and the Independent Regulatory Board for
Auditors (IRBA) disagree about how independent reviews should be
regulated.
The IRBA is responsible for regulating
auditors, while professional accountants are self-regulated through
SAICA.
IRBA chief executive Bernard Agulhas said that
if the IRBA were appointed to regulate the reviews, the board would
apply a different level of regulation than it does for auditors,
without compromising standards.
SAICA senior executive of standards Ewald
Müller argued the objective of the new Companies Act is to reduce
the costs of compliance and that regulation will push costs up.
