South African Institute of Chartered Accountants
Member | Established: 1977 | Member since 1977
SAICA is a South-African based PAO formally established in 1980. SAICA is responsible for setting ethical as well as initial and continuing professional development (CPD) requirements for its members and establishing an investigative and disciplinary system for its members. Only SAICA members with the designation of CA(SA) are eligible to register as Registered Auditors (RAs) with the IRBA, and if admitted, they are authorized to offer audit services in South Africa and are subject to full regulation by the IRBA. In addition to being a member of IFAC, SAICA is a member of the Pan African Federation of Accountants (PAFA).
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
While the Independent Regulatory Board for Auditors (IRBA) is responsible for carrying out quality assurance (QA) reviews of auditors and firms for all statutory audits, SAICA reports that it regularly engages with the IRBA on matters relating to its inspections process, and quality control and audit quality. To do this, SAICA has established an Assurance Guidance Committee (AGC) and the National Small and Medium Practice Committee (NSMPC). The committees facilitate communications with the IRBA and relay constructive feedback from IRBA to its members that are Registered Auditors (RAs) which are subject to the IRBA’s QA review system. In the event of more serious matters, SAICA will refer complaints it receives from QA reviews to the IRBA for further investigation.
Additionally, SAICA states that it has adopted an approach of pro-active engagement with the IRBA on matters relating to the inspections process and inspections findings, and more broadly on matters of audit quality. It participates in the IRBA’s processes to develop and issue local practice statements and guidance.
Furthermore, SAICA is active in undertaking its own activities to support its members’ understanding of quality control standards and their ability to carry out high-quality audits. The institute annually offers a variety of continuing professional development (CPD) activities on the relevant standards, laws and regulations, best practices, and seminars for Small-and Medium-Sized Entities and Practices. As the IRBA requires RAs to fulfill CPD in particular areas, SAICA encourages its members who are RAs to participate in the relevant CPD offerings.
Further, SAICA has developed a Technical Query Management System (TQMS) which provides members with assistance in understanding and applying the technical standards. SAICA also notes that the TQMS allows the institute to better identify the needs of its members based on the queries and subsequently, develop trainings to address those areas of concern.
As part of implementing these initiatives, SAICA states that it regularly communicates with its members regarding CPD events, applicable standards, new developments, and available guidance through its website, monthly journal, electronic newsletters, and social media platforms.
Lastly, SAICA also participates in the international standard-setting process by submitting its own comments to the IAASB or by collaborating with the IRBA to form a response.
Since IRBA adopted the new suite of Quality Management standards which will become effective December 2022 and will require significant change management for regulators and firms, SAICA is encouraged to prepare auditors in the jurisdiction for the implementation of the standards. Resources are available on the IAASB website and as part of maintaining best practices, SAICA is encouraged to raise awareness of its members about the forthcoming change, and update its educational programming to ensure that its members are sufficiently prepared for the application of the standards once they become effective.
SMO 2: International Education Standards
SAICA is responsible for determining initial and continuing professional development (IPD and CPD) requirements for its members and indicates that its Professional Development Unit regularly reviews and updates the content of its programming to ensure its requirements remain aligned with the IES. In line with this, SAICA has completed a review of the most recent revised 2019 IES and regularly reviews its education and training regulations, guidelines, processes, and procedures for improvement.
SAICA indicates that it is involved in multiple initiatives to maintain and monitor its requirements with each of the IES as part of fulfilling its membership obligations. These include: i) accrediting universities and tertiary education institutions that provide the academic and professional programs as part of the SAICA qualification; ii) regularly engaging and communicating with academic and professional program providers to discuss matters related to education, training and development of prospective Chartered Accountants and SAICA’s competency framework; iii) carrying out competency assessments; iv) providing CPD workshops on a variety of topics, including CPD courses that fulfill IES 8; v) supporting its members who are completing the Independent Regulatory Board for Auditors (IRBA)’s Auditor Development Program to become a Registered Auditor; and vi) monitoring compliance with CPD through a web-based system.
SAICA is finalizing the review of its competency framework (under the banner of the CA2025 project), where formal research was conducted to determine the competencies that accountants are required to demonstrate to remain relevant in the future. This new framework will now be implemented over the period 2021 – 2024 across the academic, training, and professional programs as well as through the professional assessments (all relevant IPD). The AGA and AT competency frameworks have also been reviewed and updated to reflect competencies required for future and relevant professional accountants.
The institute notifies members of upcoming CPD events through its CPD calendar, its electronic newsletters, its website, and makes learning materials from completed CPD events available for members to download from its site. SAICA introduced a revised CPD policy shifting from the input (hours) to the output (competence) measurement method, with more emphasis placed on members and associates for undertaking relevant lifelong learning activities linked to their specific role and development areas.
As the accountancy profession undergoes a review in overall regulation, any changes to educational requirements should continue to meet the latest IES requirements (2019 Handbook effective January 2021). SAICA is encouraged to maintain its collaboration with relevant stakeholders in this regard, utilizing the IFAC Accountancy Education E-Tool to share these requirements.
SMO 3: International Standards on Auditing
The Independent Regulatory Board for Auditors (IRBA) is the entity responsible for setting auditing standards in South Africa and has adopted ISA as issued by the IAASB; nonetheless, SAICA indicates that it actively participates, contributes, and seeks to influence the regulatory environment and development of new auditing and other related service standards. It does this primarily through its technical committee, the Assurance Guidance Committee (AGC), of which the IRBA is a permanent invitee, and by participating as an invitee to the IRBA’s Committee for Auditing Standards (CFAS), as well as serving as a member on CFAS’ Standing Committees and related task groups.
The AGC assists in providing technical support and guidance to SAICA members that conduct statutory audits, other audits, reviews, assurance engagements, and related services. Additionally, SAICA undertakes research and development of relevant products and services for the benefit of practicing members to maintain and enhance their competence in audit and assurance. These products include a variety of continuing professional development (CPD) seminars, workshops, and other events, publishing technical articles on its webpages, issuing Guides and Circulars, and communications on new standards and pronouncements. Occasionally, SAICA and IRBA will collaborate on these initiatives.
Moreover, as part of SAICA’s ongoing communications with its members regarding auditing and assurance standards, it notifies members of all IAASB consultation papers, exposure drafts, staff audit practice alerts, and other publications as they are released. SAICA also participates in the international standard-setting process by either preparing its own comments or collaborating with the IRBA to gather input and/or submit a joint response.
The IAASB has issued an exposure draft of the proposed separate standard for audits of Less Complex Entities. SAICA is encouraged to participate in the public consultation process for this landmark new draft standard.
SMO 4: Code of Ethics for Professional Accountants
SAICA’s ethical requirements were updated in December 2020 using the IESBA Handbook of the Code of Ethics for Professional Accountants, 2020 Edition and was released in January 2021 as the 2019/2020 edition of the SAICA Code. No changes are made to the IESBA Code that will result in a less onerous requirement or application of the IESBA Code. Therefore, the SAICA Code is consistent with the IESBA Code.
Moreover, SAICA notes that its Code of Ethics is also aligned with the Independent Regulatory Board for Auditors (IRBA)’s Code of Professional Conduct for Registered Auditors which enables it to facilitate compliance and implementation with both Codes amongst its members who are Registered Auditors.
SAICA has established an Ethics Committee, which includes technical advisors to IESBA Board members, to monitor developments as issued by the IESBA and assist SAICA with drafting comments and responding to Exposure Drafts. The Ethics Committee is monitoring proposed amendments to the IESBA Code and intends to roll out trainings pending the release of the amendments. It will also be updating the 2020/2021 Code in December 2021 to be aligned with the Handbook of the Code of Ethics for Professional Accountants, 2021 Edition, once released.
SAICA continuously supports its members with implementation of the Code by offering a variety of annual trainings and workshops on ethical requirements. A dedicated technical ethics seminar was held in May 2021 and an ethics series is planned for October 2021 (eight sessions are planned). SAICA will be engaging with various stakeholders such as the Ethics Institute of South Africa in order to provide a broader range of products to members during October 2021.
Like other technical areas, SAICA engages in ongoing communications to raise awareness of its members. It has an entire section of its website dedicated to ethics-related topics and content, and provides its members with electronic resources, articles, and a copy of the SAICA Code of Ethics.
As the accountancy profession undergoes a review in overall regulation, any changes to ethical requirements should continue to meet the latest IESBA Code of Ethics. SAICA is encouraged to maintain its collaboration with relevant stakeholders in this regard, utilizing the IESBA eCode to share these requirements.
SMO 5: International Public Sector Accounting Standards
The Accounting Standards Board (ASB) has adopted the Generally Recognized Accounting Practice (GRAP), which mostly align with accrual-basis IPSAS; however in practice most government departments are applying a modified cash basis of accounting while the National Treasury is developing a roadmap to implement accrual accounting across all departments (IFAC, CIPFA 2020).
SAICA reports that it provides technical assistance to the ASB’s standard-setting process and issue of local guidance. Additionally, SAICA participates in roundtable discussions with the ASB when formulating draft responses to discussion papers and exposure drafts issued by the IPSASB.
Within the institute, SAICA has a dedicated Project Director and Manager that focus on issues in the following public sector areas: reporting, assurance, governance, legislation, risk management, and capacity building. The institute organizes relevant continuing professional development courses on public sector reporting and accounting standards for its members. Furthermore, the institute indicates that it raises member awareness of recent developments in the GRAP, IPSAS, and other related issues through technical articles in its newsletters, its website, as well as its Accountancy SA magazine.
SAICA is encouraged to continue its advocacy and support toward accrual-basis IPSAS. Adoption and implementation of accrual IPSAS as issued by the IPSASB would ensure application of global best practice. It may find IFAC’s Train the Trainers: Introduction to IPSAS resource helpful for training and educational activities it offers.
SMO 6: Investigation and Discipline
SAICA is responsible for the investigation and discipline (I&D) of its members and has established a Professional Conduct Committee and Disciplinary Committee, which have handled in 2020 a total of 476 complaints and can be accounted for as follows (as of 31 December 2020): 38 cases were referred to the IRBA, 137 cases were resolved through the Professional Conduct Committee, and 6 cases were resolved through the Disciplinary Committee.
The Committees are maintained and managed by SAICA’s Project Director: Legal and Discipline with the objective of investigating and disciplining its members’ professional behavior. SAICA and the IRBA are working together to avoid an overlap with the scope of the Independent Regulatory Board for Auditors (IRBA)’s I&D system. The process between SAICA and the IRBA with regards to the investigation and discipline of SAICA members who are Registered Auditors are a part of the SAICA By-Laws.
SAICA reports that its I&D system is in line with SMO 6 requirements. In 2017-2018 it stated plans to further enhance its procedures for liaising with outside bodies and including a review of the system in its 2017 audit plans. Since then, SAICA furthered its relationships with the National Prosecuting Authority (NPA) and the Serious Economic Crime unit of the South African Police Services as well as the South African Revenue Service and the Financial Sector Conduct Authority. SAICA has both assisted these organizations with their investigations.
While SAICA indicates that it already does liaise with the IRBA on matters related to Registered Auditors and with the Commercial Crimes Unit of the South African Police Services where persons are found to be ‘holding out’ as Chartered Accountants in violation of the Chartered Accountants Designation (Private) Act 67 of 1993, the institute plans to engage with the Commercial Crimes Unit to establish a more formal process for reporting serious crimes and offences which have come to SAICA’s attention through its I&D processes.
The Auditing Profession Amendment Act, 2021 introduced a requirement that the IRBA Enforcement Committee may, if considered appropriate refer a non-audit matter brought against an RA to the relevant professional body for investigation and disciplinary proceedings. Cases of possible improper conduct, including those linked to alleged non-compliance with applicable technical and professional standards, are referred either from SAICA to the IRBA or from IRBA to SAICA. In the former, SAICA is obliged to refer cases to the IRBA in matters where an accused is both a RA and a CA(SA) at the time of the alleged offence. Upon conclusion of cases referred to the IRBA, SAICA then institutes proceedings in terms of its By-laws and takes the necessary action against the accused.
SAICA notes that it monitors developments and trends in the nature of complaints received and reports on these to SAICA’s Board. Moreover, the institute states that it guides members in interpreting and understanding their obligations under the SAICA Code of Professional Conduct, By-Laws, and other regulations and the consequences of non-compliance. After outcomes of disciplinary actions are made public, SAIPA’s Legal and Discipline staff coordinate with relevant business units to communicate the disciplinary matters with its members via information sessions and other publications.
As the accountancy profession undergoes a review in overall regulation, any changes to investigative and disciplinary procedures should continue to meet the SMO 6 best practices. SAICA is encouraged to maintain its collaboration with relevant stakeholders in this regard.
SMO 7: International Financial Reporting Standards
IFRS and IFRS for SMEs have been codified by amendments to the Companies Act 2008 and approved by the Financial Reporting Standards Council (FRSC) — the entity responsible for approving accounting standards for companies. SAICA reports that it remains actively involved in both the standard-setting and implementation processes.
SAICA demonstrates that it contributes to both the international and local standard-setting processes through a variety of means. SAICA members serve on the FRSC and the Financial Reporting Technical Committee (FRTC)—a technical committee established by the FRSC to assist in the execution of its responsibilities. After soliciting feedback from its members, the institute submits comments to IASB-issued documents as well as FRSC pronouncements. In addition, SAICA nominates members and/or supports members of the FRSC to serve on IFRS Foundation committees. SAICA indicates that it has representatives on the Trustees of the IFRS Foundation, IASB, IFRS Interpretations Committee, IFRS Advisory Council, the ASAF (Accounting Standards Advisory Forum), the SME Implementation Group, and the Emerging Economies Group (EEG), among others.
Moreover, to support the implementation process of IFRS, since 20011, SAICA has partnered with the Johannesburg Stock Exchange (JSE) to establish the Financial Reporting Investigations Panel (FRIP) to review referred instances of potential non-compliance with IFRS for JSE listed companies. The JSE carries out a proactive monitoring process whereby the financial statements of every listed company are reviewed at least once every five years to identify areas of non-compliance with IFRS. Where necessary, cases are referred to the FRIP. The JSE penalizes companies depending on the nature of non-compliance and at the same time reports the auditors and professional members involved to the respective professional bodies — the Independent Regulatory Board for Auditors and SAICA. Based on the results and feedback from the JSE, SAICA can better identify IFRS implementation challenges and organize activities to address these issues.
These activities tend to include hosting various continuing professional development opportunities. SAICA offers an IFRS Certificate, which is a learning program addressing all the IFRS that members complete through in-person and e-learning sessions. SAICA also hosts annual CPD events on the IFRS and IFRS for SMEs. Additionally, by collating repetitive member queries on the IFRS and IFRS for SMEs to its Technical Query Management System (TQMS), SAICA has developed a Frequently Asked Questions page on its website to answer member questions more efficiently. SAICA reports that it updates this page quarterly based on the queries.
Furthermore, SAICA has also developed implementation guidance and templates to assist members in understanding and applying the standards which are available online. Finally, SAICA also issues circulars and communicates other announcements to members regarding developments to the standards and potential impacts for South African entities.
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