I now recognise the hon Carrim, the chairperson of the committee, who will address the House on the Bill. [Interjections.] Hon Carrim, I would prefer it if you did it from here - it is a piece of legislation that we are dealing with. Thank you.
Chairperson, I am going to be brief. The Auditing Profession Act that was passed in 2005 provides for a legal framework for the auditing profession, including the formation of the Independent Regulatory Board for Auditors.
Now, if one wanted to be an auditor, until now one had to get articled and write a public practice exam. The board, in consultation with other professionals and the industry, has decided that instead of an exam there is a need for a training programme. This is because what the exam essentially does at the moment is to test your general competence and skills as a chartered accountant, and not the specific competencies of an auditor. So, it was decided by a large degree of consensus, if not altogether by consensus, that we should have an auditing development programme instead.
The board brought its programme to the committee and we all, for once - this might stun you, Chairperson - agreed on the Bill. All we did was amend it here and there where the National Treasury - note, Minister - forgot to put "registered" before "auditor". So, you owe us a lot in our profound amendment of the Bill!
May I add, for those of you who do not know - and you should know this - that we are number one in the world when it comes to standards for auditing. Can we give ourselves a big round of applause please? [Laughter.] [Applause.]
I also want to say, as we pass this Bill, that all the Bill does is to update with the replacement of the exam by the programme. The Companies Act has also been updated.
However, we noticed to our alarm that, 21 years later, only 8% of auditors are African and only 23% are women. So, in a report to Parliament we expressed our concern and also mentioned that there was a need to find new and innovative ways of making the auditing profession more demographically representative. We have called on the National Treasury, the board and other professional organisations, universities and other institutions of higher learning, Parliament, no less, and whoever else is relevant, to ensure that this is changed over time.
I thank everybody, including the DA and the EFF, for co-operating on this Bill and we look forward to the same co-operation on the Banks Amendment Bill, which is before us next week. Thank you, indeed.
There was no debate.
Declarations of vote:
Chairperson, indeed, we agree with the not so profound amendments to the Bill, and also agree with the standards of the auditing profession in South Africa. Of course, we share your sentiments and we are all very proud of that achievement by this profession.
The DA supports the concept of developing human capital in South Africa. We know that our country suffers from a severe shortage of critical skills and we welcome any measure that will enable more people to obtain more skills more rapidly.
The DA shares the concern that there are not enough registered African auditors in South Africa, as the chairperson has indicated, and the Portfolio Committee on Finance noted the extremely low representation of previously disadvantaged groups in the auditing profession. The chairperson is correct in saying that 8% of auditors in South Africa are African. We support the notion that new and innovative ways should be explored to increase the representivity of auditors in both racial and gender terms, while, of course, the auditing standards required are not sacrificed.
Furthermore, we support the objectives of the Auditing Profession Amendment Bill, which provide for the regulation of candidate auditors. Now, I think that those amendments were the crux of the matter.
As the background to the Auditing Profession Amendment Bill, we note the establishment of the Independent Regulatory Board for Auditors and, also as background, we note the Auditing Profession Act, Act 26 of 2005, which provides for the free education, training and professional development of auditors. It also provides for the registration of auditors and regulates the conduct of already registered auditors.
The audit industry's professional body, as mentioned, supports the initiative and so does the SA Institute of Chartered Accountants, which also manages the examinations for the career progression of candidate auditors.
While we recognise the very urgent need for transformation in the auditing profession, the auditing standards required cannot be sacrificed for the sake of fast-tracking the Bill. On this note, the Bill introduces a category of candidate auditors who will work alongside a registered auditor. I think that is a very practical recommendation and we, in fact, support the amendments to the Bill. I thank you. [Applause.]
House Chair, as the ANC we noted that the current Act did not regulate candidate auditors. As earlier indicated, the proposed amendments will ensure that all aspiring registered auditors are under the jurisdiction of the Independent Regulatory Board for Auditors.
The new Audit Development Programme, introduced in these amendments, will go a long way in ensuring that appropriate audit competency levels are realised by candidate auditors. It provides an opportunity for a specialisation period by professional accountants who want to become registered auditors. This model proposed in these amendments introduces a period of specialist training prior to any chartered accountant becoming a registered auditor.
The ANC supports the amendments because, firstly, they ensure better audit services and the protection of our people. We further support these amendments because we think they are on course to ensure that we construct a developmental South Africa. I thank you very much. [Applause.]
Chairperson, Ministers, Deputy Ministers and members of this House, on behalf of the NFP I would like to express our opinion with regard to the Auditing Profession Amendment Bill.
The NFP welcomes the Auditing Profession Amendment Bill. The auditing profession is of vital importance in our country, particularly for the purposes of accountability and transparency, both in government and in the private sector.
It is encouraging to find that the Bill seeks to introduce professional control over candidate auditors under an independent professional regulatory body such as the Independent Regulatory Board for Auditors, more so since the candidate auditors will now be regulated according to the same standards of professional conduct as qualified and registered auditors.
The Bill will ensure that candidate auditors receive specialist training prior to becoming registered auditors. This augurs well for the auditing profession. Very often, some of the duties of an auditor are delegated to a candidate auditor and the professional control and oversight mechanism introduced by the Bill will, in our view, promote increased professionalism in the auditing profession.
We submit that the aims of the Bill will bring the auditing profession into line with the regulatory provisions of other professional bodies, such as the legal profession.
The NFP also welcomes the amendment to synchronise the auditing profession with the provisions contained in the Companies Act, Act 71 of 2008. We submit that uncertainty in law causes confusion and creates loopholes in terms of which legal provisions might be flaunted with impunity. By aligning the auditing profession with the provisions of the Companies Act, Act 71 of 2008, a greater degree of certainty will be introduced to give full effect to and support of the purpose the Companies Act.
In particular, the NFP is encouraged by the inclusion of the provisions that exclude a person who has applied for debt review from entering or practising in the auditing profession. It is a truism that one cannot rely on someone to pronounce and advise one on one's finances if that person cannot manage his or her own finances. This amendment can only be positive for commerce and accordingly ought to be welcomed.
In conclusion, the NFP supports the Auditing Profession Amendment Bill. I thank you.
Chair, despite South Africa's having recently been ranked first in the world for the implementation and monitoring of auditing standards, our global competitiveness remains in steady decline. It is therefore imperative that our professional regulatory bodies, such as the Independent Regulatory Board for Auditors, deliver world-class training, regulation and policy directives not only for prospective auditors but also for the profession as a whole.
South Africa, like many other countries, has a scourge of corruption continuously assailing our Public Service sector. One could also easily say that white-collar fraud and corruption are endemic and frequently arise in both our public and private sectors.
However, because of its use of taxpayers' monies the public sector must bear our greatest scrutiny and responsibility. It is this sector that is dismally failing the people of South Africa. Fruitless and wasteful expenditure, fraud and corruption must be rooted out at their source and this is where our auditing profession bears great responsibility.
Young auditing professionals must be trained in real needs auditing in order to be able to competently and effectively deal with the myriad challenges they will face, so that they are relevant in practice. Standardisation and regulated forms of candidate auditor training are urgently required and that is what this Bill is actually addressing. Auditors need to be regulated. We also need to ensure that everything is done in such a way that we meet the growing need to ensure that, especially among black candidates, we do have candidates who can be trained.
The specialised training that candidate auditors will now undergo will provide them with the tools, skills and experience necessary to have successful careers in the profession. It is for this reason and those that have been stated in my report that the IFP supports this Bill. Thank you.
Bill read a second time.