Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    The South African Institute of Chartered Accountants

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      South Africa


    2. Name of member body:
      The South African Institute of Chartered Accountants

      Or please specify name:



    3. Individual responsible for preparation:
      Graham Terry


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      05 / 1978



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      ECSAFA



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Companies Act 61 of 1973; Close Corporations Act, 1984 (Act 69 of 1984); Public Finance Management Act 1999 (Act 1 of 1999)
      b). the Enacting body: Minister of Trade and Industry; National Treasury
      c). date the Act or Code came into force: /


    25. How can IFAC obtain a copy of the Act or Code?
      See the link attached: http://www.acts.co.za/company/index.htm


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): Close Corporations
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities SA Statements of GAAP/ IFRS from 2005
      Private companies Statements of GAAP
      Governmental GRAP
      Not-for-profit "Generally accepted acounting practice"
      Other (please describe) Close Corporations "Generally accepted acounting practice" appropriate to the business of the Corporation.
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Companies Act requirement (Act 61 of 1973); ISAs from 2005
      Private companies Companies Act requirement (Act 61 of 1973); ISAs from 2005
      Governmental Public Finance Management Act 1999, Act 1 of 1999; Auditor-General Act 1995 (Act 12 of 1995)
      Not-for-profit Companies Act requirement (Act 61 of 1973); SAAS
      Other (please describe) Close Corporations
      Other (please describe) Close Corporations


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Registrar of Companies under certain circumstances
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:
      Banking institutions have joint auditors in terms of the Banks Act.


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      Companies Act of South Africa (Act 61 of 1973); Marketable Securities Tax Act, 1948 (Act 32 of 1948); Securities Exchange Control Act 1985 (Act 1 of 1985)

    2. the Enacting body(ies)

      Department of Trade and Industry;
      National Treasury;
      Johannesburg Stock Exchange.

    3. the latest amendment date?

      Companies Act - 18 November 2003
      Marketable Securities Act amended by Act 74 of 2002
      Securities Exchange Control Act amended by Act 40 of 2002, Sections on auditing 43 & 44
      JSE Listing Requirments South Africa - 31 December 2003


    35. How can IFAC obtain a copy of the Legal authority?
      The Act can be obtained at: http://www.acts.co.za/company/index.htm

      The parliamentary website is: http://www.parliament.gov.za/pls/portal/web_app.new_middle_column?p_page_name=HOME_PAGE

      The JSE website is: http://www.jse.co.za/intro_main.jsp


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      JSE Securities Exchange Listing Requirements and see section 10 for Banks and Financial Institutions


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      Section 8 of the JSE listing requirements lays out additional reporting responsibilities for the auditor (for example, disclosure requirements relating to initerim reporting, additional disclsosures relating to borrowings, earnings per share, King Code (corporate governance) etc). Refer section 8.63 and 8.64 of the Requirements.


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Registrar of Companies, in certain instances where auditors have not been appointed.
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:
      In certain industries, joint auditors are required, but this is governed by industry specific acts (see Banks Section 10).


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity
      Other (please describe) All entities Public Accountants' and Auditors' Act, 1991 (Act 80 of 1991) 06/1991 Audit and Assurance Standards Board
      Other (please describe) Public (sector) entities Legal Authority: Public Audit Act Not available Auditor-General / International Organisation of Supreme Audit Institutions
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      PAA Act - www.paab.co.za/Legal/Public Accountants' and Auditors' Act, 1991 (Act 80 of 1991)(Current Act expected to be repealed in 2005 when Draft Accountancy Professions Bill is enacted)
      South African Auditing Standards - www.paab.co.za/Auditing Standards/Auditing Pronouncements (ISAs to be adopted from 1 January 2005)


      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Audit and Assurance Standards Board)


    44. For Audit and Assurance Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards



    45. How many voting members does the standard-setting body have?
      18


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job, sector of the profession, public practice (large and small firms), commerce and industry


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Public Accountants' and Auditors' Board.


    49. What is the term of appointment for members?
      3 Year(s)


    50. For how many years has the standard-setting body been in existence?
      53 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      24,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      7,00



    52. To what entity is the standard-setting body accountable?
      The Public Accountants' and Auditors' Board


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposed for 2-3 months

    2. accessibility of meetings (i.e., public or private)

      Meetings are held in public and in private for Executive sessions

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority vote is required to approve final standards

    4. other relevant due process activities

      Established a Consultative Advisory Group (CAG)


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      4 Day(s)


    Section 5B -- Standard-Setting (Auditor-General / International Organisation of Supreme Audit Institutions)


    44. For Auditor-General / International Organisation of Supreme Audit Institutions, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Auditor-General
      Independant State Institution

      The standards are set by the International Organisation of Supreme Audit Institutions


      b. Name of standards

      Generally Accepted Government Auditing Standards


    45. How many voting members does the standard-setting body have?
      www.intosai.org


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: www.intosai.org


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Refer to INTOSAI at www.intosai.org


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Refer to INTOSAI at www.intosai.org


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      Refer to INTOSAI at www.intosai.org


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Refer to INTOSAI at www.intosai.org

    2. accessibility of meetings (i.e., public or private)

      Refer to INTOSAI at www.intosai.org

    3. approval process for final standards (i.e., majority required to approve final standards)

      Refer to INTOSAI at www.intosai.org

    4. other relevant due process activities

      Refer to INTOSAI at www.intosai.org


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice PAAB and SAICA 10/2002 PAAB and SAICA
      Professional Accountants in Business SAICA 10/2002 SAICA
      Professional Accountants in the Public Sector PAAB and SAICA 10/2002 PAAB and SAICA
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      SAICA's website: http://www.saica.co.za - look for Constitution and By-laws
      PAAB's website: htt://www.paab.co.za - look for PAA Act


      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (PAAB and SAICA)


    56. For PAAB and SAICA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      PAAB - statutory body regulating the public accountancy function
      SAICA - voluntary association


      b. Name of standards

      Code of Professional Conduct
      Constitution and By-laws
      Disciplinary reglations (PAAB)


    57. How many voting members does the standard-setting body have?
      SAICA Board (16 members) PAAB (16 members)


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job, sector of the profession, public practice [large and small firms], commerce and industry.

      The remaining responses in this Section relate to SAICA.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Board of SAICA [member body]


    61. What is the term of appointment for members?
      3 Year(s)


    62. For how many years has the standard-setting body been in existence?
      24 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Incorporated in the SAICA budget

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?
      The Board of SAICA


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Any changes to the Code of Professional Conduct are exposed to the general body of members for comment.

    2. accessibility of meetings (i.e., public or private)

      Meetings are for the Ethics Committee members only, although interested parties may be invited to the meeting

    3. approval process for final standards (i.e., majority required to approve final standards)

      Any changes have to be approved by a majority vote of the Board of SAICA

    4. other relevant due process activities

      None


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      3 Day(s)


    Section 6B -- Standard-Setting (SAICA)


    56. For SAICA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Voluntary association

      b. Name of standards

      Code of Professional Conduct
      Constitution and By-laws


    57. How many voting members does the standard-setting body have?
      SAICA Board (16 members)


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job, sector of the profession, public practice [large and small firms], members in commerce and industry


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Board of SAICA (member body)


    61. What is the term of appointment for members?
      3 Year(s)


    62. For how many years has the standard-setting body been in existence?
      24 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Incorporated in the SAICA budget

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?
      Board of SAICA


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Any changes to the Code of Professional Conduct are exposed to the general body of members for comment.

    2. accessibility of meetings (i.e., public or private)

      Meetings are for the Ethics Committee members only, although interested parties may be invited to the meeting

    3. approval process for final standards (i.e., majority required to approve final standards)

      Any changes have to be approved by a majority vote of the Board of SAICA

    4. other relevant due process activities

      None


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      3 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      School education is compulsory from the age of seven years until the last day of the school year that the learner reaches the age of fifteen years or the ninth grade, whichever occurs first.

      School education includes primary education (Grades 1 - 7) and secondary education (Grades 8 - 12).

      At tertiary education level (higher education) learners can choose to either attend a Technikon or an University.

      In line with the SAQA Act No.58 of 1995, South Africa adopted a national Qualifications Framework (NQF. Technikon qualifications are generally on levels 3 - 6 and University qualifications on levels 6 - 8.

      The objectives of the NQF are as follows:

      - To create an integrated national framework for learning achievements;
      - Facilitate access to, and mobility and progression within education, training and career paths;
      - Enhance the quality of education and training;
      - Accelerate the redress of past unfair discrimination in education, training and employment opportunities;
      - Contribute to the full personal development of each learner and the social and economic development of the nation at large.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      The PAAB sets the education requirements to practice as an auditor. A person that wants to perform the attest function has to register with the PAAB as a Registered Accountant and Auditor (RAA).

      The public is often unaware that an accountant need not necessarily be a Chartered Accountant (CA), but may be a member of one or several other accounting bodies, or none at all.

      The rules of SAICA apply only to those individuals who have become members of SAICA. Similarly, the rules of the PAAB govern only those persons who are RAAs.

      The PAAB recognises SAICA's education requirements for qualification as a RAA - refer academic requirements, professional examinations and practical experience as described in the answer to question 69. The PAAB then sets and administers the Public Practice Examination (PPE) as described under "Final qualifying examination" in the answer to question 69 below.

      SAICA is a voluntary association. In terms of the Chartered Accountants Designation Act only members of SAICA are allowed to use the CA(SA)designation. SAICA sets the requirments for membership. The requirements are described below in the answer to question 69. In this regard SAICA recognises the PPE for purposes of membership of SAICA.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      SAICA currently accredits 14 universities (there are 21 in total) for delivery of the Certificate in the Theory of Accountancy (CTA). This is a post-graduate qualification in Accountancy and is a requirement for entry into Part I of the Qualifying Examination (QE).

      Universities determine their own entry requirements for admission into the B Com Accounting degree. Generally the minimum requirement is a Grade 12 certificate with "exemption" (i.e. admission to a university).

      Admission into the post-graduate programme (CTA) is also determined by the respective accredited universities. Generally it is a BCom accounting degree obtained from an accredited (by SAICA) university.
      Professional examinations
      Part I of the QE is set an administered by SAICA. This examination is completed as soon as possible after completion of the academic requirements and is written in March each year.
      Practical experience
      A minimum of 36 months practical experience under a registered training contract, with an accredited training office (in public practice or in commerce and industry)
      Final qualifying examination
      Candidates have two options in terms of Part II of the QE, i.e. either Financial Management or Auditing (Public Practice Examination).

      The Public Practice Examination (PPE) is set and administered by the PAAB and is applicable to candidates who gained their practical experience in public practice.

      The Financial Management paper is for people who gained their experience in commerce and industry and this examination is set and administered by SAICA.
      Other (please describe) Delivery of education programme
      With respect to the delivery of the education programme (Q74):

      The programme is delivered by 14 universities.
      Part I of the Qualifying Examination is set and administered by SAICA.
      Part II of the Qualifying examination is set and administered as follows:
      PAAB: Auditing (Public Practice Examination)
      SAICA: Financial Management


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      The Education Committee (EDCO) and the Training Requirements Committee (TRECO) of SAICA.

      The Education Committee (EDCOM) of the PAAB.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      EDCO prescribes the syllabus for purposes of entry into the Qualifying Examination.
      - Six syllabus committees are set when the syllabuses are due for review (every second year), that is, a committee for each of the five core courses (being External Financial Reporting; Taxation; Management Accounting and Financial Management; Auditing and Corporate Governance; and Information Technology) and one for the supportive courses (being Administration of Estates, Commercial Law, Economics, Business management and aspects of industrial psychology and Mathematics and statistics). Each is chaired by an EDCO member.
      - The meetings consider current developments as well as syllabi of other institutes (international trends) when reviewing SAICA's syllabi.
      - Universities are invited to nominate participants to the relevant committees based on the individual's expertise in a particular area. Targeted members from public practice and commerce and industry are also invited to participate.
      - Any revisions to the syllabuses are communicated to all accredited education institutions for comment before being finalised.
      - The syllabus committees then forward the revised syllabuses to the EDCO for final approval.

      TRECO prescribes the experience requirements in order for people to qualify as CAs(SA). Where applicable, changes in minimum requirements are distributed to accredited training offices for comment before being finalised.

      The PAAB's EDCOM developed a Recogntion Model in terms of qualification as an RAA. The model sets out minimum requirements in terms of an academic programme, core assessment programme, training programme (experience requirements) and education programme (integration of academic and experience before writing the PPE) In terms of this model SAICA's qualification process is recognised by the PAAB as meeting the minimum requirements in terms of education and training (experience).

      Part I of the Qualifying Examination (QE) is set and administered by SAICA. Candidates can complete Part II of the QE in either Auditing (set and administered by the PAAB) or Financial Management (set and administered by SAICA).

    2. How many voting members does the relevant body(ies) have

      EDCO - 19 members
      TRECO - 16 members

      PAAB's EDCOM - 15 members

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      24 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      Contact SAICA.

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain) See "Other" in Q69 (SAICA, PAAB, Universities)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      Public Accountants' and Auditors' Board (PAAB)
      (Statutory Body)


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      Public Accountants' and Auditors' Board (PAAB) (Statutory Body)


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      None



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Public Finance Management Act 1999 06/1999 Accounting Standards Board
      Ministry/department Public Finance Management Act 1999 06/1999 Accounting Standards Board
      Statutory authority/agency Public Finance Management Act 1999 06/1999 Accounting Standards Board
      Profit entity owned by government Public Finance Management Act 1999 06/1999 Accounting Standards Board
      State governments Public Finance Management Act 1999 06/1999 Accounting Standards Board
      Local governments Municipal Finance Management Act 2004 Accounting Standards Board
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Accounting Standards issued by Accounting Standards Board (ASB) can be obtained from the ASB website www.asb.co.za
      Copies of the Act are available in the South Africa Treasury website www.gov.za


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Accounting Standards Board)


    83. For Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The Accounting Standards Board (ASB) was established as a requirement of Public Finance Management Act with aim of setting Accounting The ASB was established by section 91 of the Public Finance Management Act with the aim of setting Accounting Standards for Public Sector. The body operates under the South Africa National Treasury department. It is fully funded by the Government.ASB was formed in year 2002

      b. Name of standards

      Standards of Generally Recognised Accounting Practice (GRAP).

      Section 55 of the PFMA requires public entities to prepare financial statements in accordance with GAAP, unless the ASB approves the application of GRAP for that public entity.


    84. How many voting members does the standard-setting body have?
      10


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The 10 members are selected by the Minister of Finance based on their technical knowledge and expertise. Members are appointed in their individual capacity and not as representatives of organisations.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Minister of Finance in consultation with the Auditor-General appoints the Board.


    88. What is the term of appointment for members?
      3 Year(s)


    89. For how many years has the standard-setting body been in existence?
      2 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      624,573

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      7,00



    91. To what entity is the standard-setting body accountable?
      The National Treasury - Ministry of Finance


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)

      Members of public are allowed to attend the board meeting as observers.
      Members are also encouraged to participate in the work groups that draft the standards


    3. approval process for final standards (i.e., majority required to approve final standards)

      For the purposes of approving an Exposure Draft or a Standard, each Board
      member represented on the Board has one vote. A quorum of six members is required. If a Standard is approved by at least three quarters of the total voting rights present at a meeting, the pronouncement is published and released. Exposure Drafts are approved by at least a majority of the total voting rights present at a meeting.


    4. other relevant due process activities

      If considered appropriate, discussion forums are held in order to obtain further opinions on issues identified in the exposure process.
      In instances where there are significant changes or unresolved issues associated with an exposure draft, the board may decide to re-expose a proposed standard of GRAP.


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      6 Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Companies Act 1973 Accounting Practices Board
      Other (please describe) Other entities Companies Act Accounting Practices Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      Companies Act is available on www.acts.co.za
      Accounting Standards are available from SAICA or the IASB as they are the same.


      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Accounting Practices Board)


    95. For Accounting Practices Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      A private organisation established by the profession. SAICA is the secretariat.
      South Africa has adopted International Financial Reporting Standards (IFRS) issued by the IASB, therefore the Accounting Practices Board(APB) does not set standards, but follows due process before approving them for South Africa.


      b. Name of standards

      Statements of Generally Accepted Accounting Practice


    96. How many voting members does the standard-setting body have?
      18


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Appropriate representative constituent bodies of South Africa are selected. These constituent bodies appoint members and alternates to the Board, who have to be Chartered Accountants.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Constituent bodies are appointed if all members approve them. The body nominates a member and alternate to attend all meetings, which is approved by the Board.


    100. What is the term of appointment for members?
      2 Year(s)


    101. For how many years has the standard-setting body been in existence?
      20 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      65,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      6.50



    103. To what entity is the standard-setting body accountable?
      South African Institute of Chartered Accountants (SAICA)


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Prior to being issued as standards these are exposed for a comment period of 90 days

    2. accessibility of meetings (i.e., public or private)

      From November 2004, meetings will be held in public.

    3. approval process for final standards (i.e., majority required to approve final standards)

      First time presented to Board - unanimous approval from all members. If unanimous approval not obtained, 80% of members next time re-presented.

    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      4 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      JSE Securities Exchange South Africa as per Stock Exchanges Control Act (Act 1 of 1985)


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      In terms of the Companies Act, must appoint an Auditor registered as such in terms of the Public Accountants and Auditors Act 1991 (Act 80 of 1991).

      The GAAP monitoring panel, which is a joint initiative between SAICA and the JSE, monitors and enforces compliance with accounting standards.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      None

    2. accounting and auditing standard-setting

      None

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The GAAP Monitoring Panel operates on a complaints received basis where the financial statements of a listed entity would be investigated based on being alerted to the fact that there appears to be a contravention of the accounting standards.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      JSE Securities Exchange South Africa



    Section 10B -- Stock Exchange
    JSE Securities Exchange South Africa Details


    110. For JSE Securities Exchange South Africa, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Submission of half yearly reporting of results and annual audited financial statements and reports and compliance to the Compancies Act and other related Acts. The GAAP Monitoring Panel operates on a complaints received basis where the financial statements of a listed entity would be investigated based on being alerted to the fact that there appears to be a contravention of the accounting standards.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      For companies - restatement of financial statements For directors - referred to their professional body for investigation

    3. How enforcement actions are administered.

      By the JSE Securities Exchange Listings Division By SAICA and the PAAB - Disciplinary Committees



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Registrar of Banks. Office of Banks as part of the SA Reserve Bank, headed by an employee (Reistrar) in the service of the SA Reserve Bank. Reporting is done as required by the Bank Act 1990 (Act 94 of 1990) and the Companies Act 1973 (Act 61 of 1973)and must comly with GAAP.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      Banks must have at least one auditor. If total assets exceed R10 000 000 000, it must have at least two independent auditors. Registrar must approve the appointment/s or appoint Auditor/s himself. Accounting Standards compiled by ASB and Auditing Standards by APB.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Registrar of Office of Banks must approve or appoint Auditors who is registered as such with the Public Accountants and Auditors Board.

    2. accounting and auditing standard-setting

      Representation on the ASB and APB

    3. review of financial statements prepared by listed entities

      The financial statements of banks are submitted to the Registrar of banks.

    4. enforcement of accounting, reporting and auditing requirements

      Through the Banks Act and Regulations



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      Financial Services Board


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Financial Services Board Act,1990 (act 97 of 1990)and Financial Advisory and Intermediary Services Act 37 of 2002.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      If and when required, appointment of persons registered with the Public Accoutants and Auditors Act and approved by the Registrar.

    2. accounting and auditing standard-setting

      Financial statements in comformity with GAAP. Audits to be done in tems of SAAS.

    3. review of financial statements prepared by listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Financial Services Boart Registrar of Long-term Insurance (the executive officer of the Financial Services Board)


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Financial Srvices Board Act,1990 (Act 97 0f 1990) Long-Term Insurance Act 1998 (Act 52 of 1998) Short-Term Insurance Act 1998 (Act 53 of 1998)


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      Acts require the appointment of persons who is registered as auditors with the Public Accountants and Auditors Board (PAAB)and must be independent.

    2. accounting and auditing standard-setting

      Accounting standards set by the ASB, and the above named Acts determines amount of assets and spread thereoff to be held. Auditing standards set by the APB.

    3. review of financial statements prepared by listed listed entities

      Various departments within the FSB are responsible for reviewing financial statements.

    4. enforcement of accounting, reporting and auditing requirements

      Done through various Acts which fall within the ambit of the FSB



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Council for Medical Schemes
      Micro Finance Reguatory Council


    122. What is the source of Legal authority of each regulatory authority?
      Medical Schemes Act
      Usury Act Exemption Notice of 1 June 1999


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      None

    2. accounting and auditing standard-setting

      None

    3. review of financial statements prepared by listed listed entities

      Financial statements of medical schemes are submitted to the Registrar of Medical Schemes where they are reviewed

    4. enforcement of accounting, reporting and auditing requirements

      Through the Medical Schemes Act



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      Section 22A of Public Accountants and Auditors Act provides for the review of the practice of an accountant and auditor and take disciplinary action (section 23).

      Each firm would have its own program of quality assurance review.

      The PAAB also has a practice review department which monitors quality control relating to compliance with auditing standards.
      The GAAP Monitoring Panel (GMP) is a joint monitoring function between the JSE and SAICA. The GMP monitors compliance with accounting standards (see JSE Securities Listing Requirements section 8.65).



    125. Under what authority does the organization conduct the program of quality assurance review?


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      Various forms of review takes place within a firm and there is also a practice review done by the Public Accountants' and Auditors' Board.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      South African Institute of Chartered Accountants
      Public Accountants' and Auditors' Board

      SAICA's disciplinary process becomes operative once an allegation of improper conduct has been made against a member or associate. SAICA obtains its powers from its Constitution and By-laws, and it is important that the disciplinary process is conducted in accordance with these provisions. The By-laws determine a different process to be followed when the person against whom a complaint is being made is both a Registered Accountant and Auditor (RAA) and a Chartered Accountant (CA), or a CA or associate only. For this reason, one needs to distinguish between RAAs and CAs, (who might not necessarily be RAAs), and the disciplinary processes to which they are subject.

      A person can be disciplined by the two separate bodies for the same offence if he is registered with the PAAB and is also a member of SAICA.
      Where the person is registered with the PAAB only, the matter is dealt with by the PAAB's Investigation Committee and/or Disciplinary Committee. The conduct of the person is not considered by SAICA. The same applies to a firm of Registered Accountants and Auditors whom are not dealt with by SAICA as SAICA has jurisdiction over individual members and associates only.
      Where the person is a member of SAICA only, the complaint is referred immediately to SAICA's Standards Division, and is not dealt with by the PAAB.
      Where the member of SAICA is or was registered with the PAAB at the time of the alleged offence, the matter is forthwith referred to the PAAB as SAICA and the PAAB run a joint disciplinary process, administered by the Legal Department of the PAAB.



    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      16


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job, sector of the profession, public practice (large and small firms), commerce and industry.


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Board of SAICA, PAAB


    134. What is the term of appointment for members?
      3 Year(s)


    135. For how many years has the body been in existence?
      24 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      165,714

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      7,00 (specify currency)



    137. To what entity is the body accountable?
      The Board of SAICA
      PAAB



    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      3 Day(s)



     

     

    Disclaimer

    The information contained within the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaires, Part 2 SMO Self-Assessment Questionnaires, and Part 3 SMO Action Plans are based entirely on information provided to IFAC by the IFAC member or associate to which the information relates. Further, the information has been collected by IFAC for the exclusive use and benefit of IFAC and IFAC's members and associates, but is being made available through this website to the general public in the interest of transparency of the IFAC Member Body Compliance Program. While certain efforts are made to validate the information, IFAC undertakes no obligation to confirm or investigate the completeness or accuracy of any of the content of the questionnaire or action plan, now or at any time in the future. Persons accessing the questionnaire or action plan assume full responsibility for the use of the information set forth herein. IFAC does not make any express or implied warranties or representations whatsoever as to any information provided through the questionnaire or action plan, including, without limitation, that the information contained herein will be error-free. IFAC shall not be liable for any damages, including, without limitation, direct, indirect, incidental, special, punitive or consequential damages, that result in any way from your use or reliance on information provided in the questionnaire or action plan. If you need to rely on the information set forth herein for any purpose, you are urged to confirm the information set forth herein with other sources.

    * Indicates organizations that qualify to submit SMO Action Plans biennially

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