Presentation on theme: "INDEPENDENT REGULATORY BOARD FOR AUDITORS Bernard Agulhas Chief Executive Officer 1 Select Committee on Finance 20 June 2012."— Presentation transcript:
INDEPENDENT REGULATORY BOARD FOR AUDITORS Bernard Agulhas Chief Executive Officer 1 Select Committee on Finance 20 June 2012
Strategic Focus Objectives Highlights for the year Report on Financial Statements Report of the Auditor-General Performance Information Questions 2 AGENDA
3 STRATEGIC FOCUS Protect the financial interest of the public by ensuring that only suitably qualified individuals are admitted to the auditing profession and that registered auditors deliver services of the highest quality and adhere to the highest ethical standards.
OBJECTIVES 4 Developing and maintaining auditing and ethical standards which are internationally comparable; Providing an appropriate framework for the education and training of properly qualified auditors as well as their on-going competence; Registration of auditors who meet the registration requirements; Monitor compliance with reportable irregularities and anti-money laundering; Monitor registered auditors compliance with professional standards; Investigating and taking appropriate action against registered auditors in respect of improper conduct;
5 HIGHLIGHTS for the YEAR South Africa achieves 1 st position out of 139 countries for its auditing standards in the World Economic Forum’s 2010 Global competitiveness rankings Code of professional conduct for registered auditors came into effect 1 Jan 2011 European Union approves the IRBA as a regulator which is equivalent to the best in the world The IRBA is approved for it registered auditors to provide Broad- Based Black Economic Empowerment Verification Services
6 FINANCIAL STATEMENTS STATEMENT OF FINANCIAL PERFORMANCE 20112010 R’000 Revenue 67 31160 688 Operating Expenses (59 422)(58 986) Operating surplus 7 8891 702 Investment Revenue 1 309714 Gain on non-current assets 6 359 Borrowing Cost (93)(144) Surplus for the period 9 1058 631
FINANCIAL STATEMENTS 7 STATEMENT OF CHANGES IN NET ASSETS 20112010 Surplus for the period9 1058 631 Opening balance19 77511 144 Total Net Assets28 88019 775 Consisting of: Total cash funded reserves19 65817 897 Trust Fund10 000 Education Fund2 1131 157 Disciplinary Fund7 5456 740 Accumulated Surplus9 2221 878 Total Net Assets28 88019 775 TOTAL CASH23 54215 307 Cash available for operations3 884(2 590)
8 FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION 20112010 Plant and Equipment5 4346 932 Intangible Assets3 357501 Restricted Cash10 000 Trade and other receivables4 7934 482 Cash13 5425 307 Total Assets37 12627 222 Operating lease incentive3 2142 995 Finance lease344742 Trade payables4 6883 710 Total Liabilities8 2467 447 Net Assets28 88019 775
REPORT OF THE AUDITOR GENERAL 10 RESULTS FOR 2010 AND 2011 YEAR ENDS REPORT ON THE FINANCIAL STATEMENTS Clean opinion REPORT ON OTHER LEGAL REGULATORY REQUIREMENTS Predetermined objectives No material finding Compliance with laws and regulations No findings INTERNAL CONTROL No significant deficiencies
PERFORMANCE INFORMATION 11 Strategic Measurable objectivePerformance Targets 2010/11Achievement 31 March 2011 AUDITING AND ETHICAL STANDARDS AND REPORTABLE IRREGULARITIES Developing and maintaining auditing and ethical standards which are internationally comparable To adopt, develop and issue new audit guidance to ensure guidance remains relevant and actively addresses gaps 75% of Target dates for issuing audit pronouncements as per CFAS Project Timetable adjusted on a quarterly basis Achieved Revise and issue the revised the Code of Professional Conduct June 2010 Achieved To develop and issue additional guidance on ethical issues from the Code of Professional Conduct 75% of Target Dates for issuing additional guidance is as per CFAE work programme adjusted on a quarterly basis Not yet applicable CFAE Work Programme not yet established. To process reportable irregularities reports received from registered auditors timeously 90% adherence to close files closed within 40 days from receipt of initial reportable irregularities report Not Achieved: 66% of RI Files were closed within 40 days. 22% of RI Files were closed after 40 days 12% of reports due, not yet received
PERFORMANCE INFORMATION 12 Strategic Measurable objectivePerformance Targets 2010/11Achievement 31 March 2011 PROGRAMME EDUCATION, TRAINING AND PROFESSIONAL DEVELOPMENT Providing an appropriate framework for the education and training of properly qualified auditors as well as their on- going competence To determine and implement competencies requirements for auditors Competencies requirements completed by 30 June 2010 Achieved To ensure that only competent candidates enter the audit profession 100% adherence to assessment programme Achieved To monitor the programmes and institutional requirements of accredited professional bodies Date Final Monitoring Reports are issued Achieved To register and approve training contracts Approved – response within 24 hours of receipt Achieved Support the transformation initiatives of the IRBA Provide a support programme for black repeat candidates Achieved
PERFORMANCE INFORMATION 13 Strategic Measurable objectivePerformance Targets 2010/11Achievement 31 March 2011 INSPECTIONS Monitor registered auditors' compliance with professional standards To inspect and review the work of registered auditors on a regular basis 100% adherence to review plan Achieved To supervise registered auditors who are accountable institutions in terms of FICA List of accountable institutions reviewed and updated by 30 August Partially achieved List of accountable institutions still requires to be finalised LEGAL To investigate and take appropriate action against registered auditors in respect of improper conduct To finalise all complaints received timeously 80% of complaints received closed within 18 months Not achieved 66% was achieved. The increasing complexity of the cases which are prosecuted made this an unrealistic target. The target has been adjusted appropriately for the future.
PERFORMANCE INFORMATION 14 Strategic Measurable objectivePerformance Targets 2010/11Achievement 31 March 2011 STAKEHOLDERS RELATIONSHIP Developing and maintaining corporate and stakeholder relationships to enhance performance, accountability and public confidence To collaborate and build relationships with critical stakeholders Approval of Stakeholder and Communication Plan Not achieved Currently was still used as no major changes in stakeholders REGISTRATIONS Registration of registered auditors (RA) who meet the registration requirements To ensure adherence to registration policies and procedures Annual registration by set registration date Not achieved Staff and processes not adequate in department, management changed and process improved.
PERFORMANCE INFORMATION 15 Strategic Measurable objectivePerformance Targets 2010/11Achievement 31 March 2011 OPERATIONAL EFFECTIVENESS Strengthening the IRBA's organisational capability, capacity and performance to deliver on its mandate in an economically, efficient and effective manner, in accordance with the relevant regulatory frameworks To ensure a sustainable source of revenue to fund operations in accordance with the IRBA's mandate Sufficient funds to deliver on mandate and 5 % deviation on expenses from budget vs actual Achieved sufficient fund but Not achieved on expenses A positive variance of 15% was achieved due to request from National Treasury to save on cost. To ensure that appropriate talent is recruited, developed and retained Approved recruitment strategy Achieved To maintain and align IT systems to support business needs Approved IT strategy and plan and implementation thereof Not achieved Strategy for the year mainly on implementation of new database and work flow system. Overall IT strategy delayed To transform the IRBA in line with employment equity legislative requirements by implementing employment equity plans and achieving targets within the plan Approved employment equity plan and 90% achievement of target Achieved