Legislative Acts - Auditing Profession Act 26 of 2005 - New Disciplinary Rules

8/12/2019 Legislative Acts - Auditing Profession Act 26 of 2005 - New Disciplinary Rules

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12 N o . 30004 GOVERNMENT GAZETTE, 9 JUN 2 7

BOARD NOTICE 69 O 2 7,/irhN D E P E N D E N T R E G U L T O R Y OARD FOR UDI T O RSTHE INDEPENDENT REGULATORY BOARD FOR AUDITORS IRBA)

NEW DISCIPLINARY RULES~o t i ces hereby given, for general information, in accordance with the provisions ofsection 1O 1) and section 59 (8)(b) of the Auditing ProfessionAct 26 of 2005, of the repeal of theDisciplinary Rules made under the Public Accountants' and Auditors' Act 80 of 1991excludingparagraphs 2.1 to 2.1.21 inclusive, thereof, and the adoption of the New DisciplinaryRuks with effect from June 2007, which are published hereunder.

For further assistance enquiries may be directed to:The Director- LegalIRBP Box 751595Garden View2047Tel: (01 1) 622-8533ax (011)622-4029E-mail: [email protected]

wpandent Regulatory Board for Auditors


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S T A A T S K O E R A N T , 9 JUNlE 2 7 No 3 4 13

REPEAL OF THE D ISCIPLINARY RULES MA DE UNDER THE PUBLICACCOUNT ANTS' AND AUDITORS' ACT, 8 OP 1991 AND ADOPTION OFNEW DISCIPLINARY RULES ON 7 JUNE 2007

Having published its intention to do so for comm ent in the Government G azette on26 April 2007, the Board now resolves under section 10 1) of the Auditing ProfessionAct, 26 of 2005 ( the Act ) read with section 4 l) a) i) , ii) and iii) of the Act to i)the repeal of the D isciplinary Regulations referred to n section 59 8) b) of the Act andii) the p rescription by the Board of the following D isciplinary Rules:

I DEFINITIONS1 1 1 the Act means the Auditing Profession Act, 26 of 2005 and any

expression used in these Rules which is defined in the Act bears, unlessthe con text indicates the contrary, the meaning assigned to it in the Act;

1 1 2 the Board means the Independent Regulatory B oard for Auditorsestablished by section 3;

1 I3 the CEO mean s the person appointed by the B oard as Chief ExecutiveOfficer u nder section 9 a) or any person acting in that capacity;

1 1 4 the chairperson of the Disciplinary Comm ittee means the retiredjudge or senior advocate who is appointed by the Board as such andincludes a deputy chairperson of the DiscipIinary Comm ittee acting aschairperson at a meeting of the Disciplinary Committee where thechairperson is absent or for any reason unable to perform h is or herfunctions;

1 1 5 the Code means the Code of Professional Conduct prescribed by theBoard under section 4 l) c) and includes the Code ofProfessiona

Section 24 2) a) read with the resolutions by the Board on 20 June 2006


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4 No 30004 GOVERNMENT GAZETTE 29 JUNE 2007

onduct referred to in section 59(8 )(c), until it has been repealed by theBoard;

the Director: Legal means the person designated as such, who is anemployee of the Board, or any person acting in that capacity, or anyemplo yee of the Board, notwithstanding his or her designation, who isappointed or charged by the Board to perform the functions performed bythe Director: Legal as at the promulgation of these rules;

the Disciplinary Advisory Committee means a sub-committee of theBoard established by the Board on 20 June 2006 under section 20(1);

the Disciplinary Committee means the committee established by theBoard under section 20(2)(f);

firm , in the context of these Rules, means a partnership, company orsole proprietor referred to i n section 38;2

1 1 10 the Investigating Com mittee means the com mittee established by theBoard under section 20(2)(e);

1 1 11 pro orma complainant means the person appointed under section50(2)(a) to present the charge to the Disciplinary Committee;

1 1 12 registered auditor , in the context of these Rules, means an individualor firm registered as an auditor with the Board or who was so registered atthe time that the alleged improper conduct took place, w hether thatregistered auditor is or was in public practice o r not, and inc ludes the dulyauthorised representative of the registered auditor if the registered auditorconcerned is a firm;

1 1 13 the respondent means a registered auditor whose conduct is thesubject of any proceedings of whatsoever nature, including a com plaintor a decision whether or not to refer such conduct to investigation) under

Section v firm


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STAATSKOERANT 29 JUNlE 2007 No. 30004 15

these Rules as well as the legal representative of such a registered auditor,if any; and

1.1.14 theseRules means the isciplinary Rules prescribed under section1 O 1 ) and includes these definitions; and

1.2 any reference to any section in these Rules is a reference to the correspondingsection of the Act;

1.3 these Rules shall, wherever possible, be construed in conformity with the Act;and

1.4 the headings to and any footnotes in these Rules shall be taken into account inthe interpretation of these R ules.

2 COMMENCEMENT OF N INQUIRY INTO ALLEGED IMPROPERCONDUCT

2.1 If an allegation of im proper conduct against a registered auditor comes to theattention of the Director: Legal or the CEO, he or sh e must refer it to theInvestigating Com mittee if

2.1.1 the allegations are in the public dom ain and he or she on reasonablegrounds including report from a foreign regulator) suspects that arespondent has committed an act which may render such responden tguilty of im proper conduct; or

2 1 2 the allegations are referred to him o r her by th e Inspection Comm itteeestablished under section 20 2) d); or

2.1.3 a court or appropriate regulator sends or directs to be sent) a record orreport under section 48 2); or

2.1.4 a mem ber of the public lodges a complaint with him o r her and he or she:2.1.4.1 establishes that the person or firm com plained about is a registered

auditor;


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2.1.4.2 establishes that the com plaint falls within the jurisdiction of theBoard; and

2.1.4.3 is of the opinion that the com plaint of improper conduct appea rs tobe j ~ s t i f i e d . ~

2.2 Mem bers of the public who wish to lodge a complaint of improper conductagainst a registered auditor shall do s o on affidavit unless the Director: Legalor the CEO decides otherwise. A compla int shall set out clearly and conciselythe specific acts or failures to act giving rise to the com plaint of improperconduct.

2.3 In order to establish whether the g rounds for referral to the InvestigatingCommittee referred to in 2.1.1 or 2.1.4 are present the Director: Legal or theCEO may in his or her discretion:

notitji the respondent in writing o f the nature of the com plaint and callupon that respondent to furnish a written explanation in answer to thecomplaint within 30 days of such notice; andrequest a com plainant to provide further particulars on an y aspect of thecomplaint.

3 INVESTIGATION OF COMPLA INT OR ALLEGATIONS OFIMPROPER CONDUCT

3 1 When a compla int or allegation o f improper conduct against a respondent isreferred to the Investigating Comm ittee the Investigating Com mittee mustinvestigate such complaint or allegation and may:

3.1.1 take any s teps which are not prohibited by law to gather information withregard to the comp laint or allegation;5

3.1.2 request a com plainant to provide furthe r particulars on a ny aspect of thecomplaint;

Section 48 1) and 2)


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3 1 3 request the respondent to app ear before the Investigating co mm itte e6 inorder to assist it to formulate its recommendations to the ~ o a r d ' y noticespecifying the time and place of the meeting o f the InvestigatingComm ittee, provided that the notice shall inform the respondent:

that the respondent has the right to be assisted or represented byanother person;8that any statement m ade by the responde nt to the InvestigatingCom mittee may be used in evidence9 and that the proceedings of thelnvestigating Comm ittee will be recorded; andthat section 5 l(4) of the Act provides that a respondent may beordered to pay the reasonable costs incurred by the InvestigatingCom mittee and the Disciplinary Comm ittee in connection with aninvestigation and hearing, if appropriate, and that a failure to appearbefore the lnvestigating C omm ittee may increase the costs likely tobe incurred by the Investigating Committee and the DisciplinaryCommittee;

3 1 4 require, by notice in writing, the registered auditor to whom the complaintor allegation of improper conduct relates or any other person to produceto the Investigating Com mittee at a time and place stipulated in the noticeany information including, but not limited to, any working papers,stateme nts, correspondence, book s or other docume nts, which is in thepossession o r under the control of that registered auditor or other personand which relates to the subject matter of the charge(s), in ch di ngspecifically, but without limitation, any working papers of the registeredauditor;

Section 48 3)Section 48 3) b)Section 48 4)

ection 48 7)ection 48 4) a)

Section 48 4) b)O Section 48 5) a) i)


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request the CEO to institute legal action against any person who fails toproduce to the lnvestigating Com mittee the information referred to in3.1.4 at the time and place stipulated in the n otice; andinspect and, if the Investigating Comm ittee considers it appropriate, retainany inform ation obtained pursuant to 3.1.4 and 3.1.5 and m ake copies ofand take extracts from such information.12

Notwithstanding the provisions in 3.1.3.1 and 3.1.3.2, the InvestigatingCom mittee and the respondent may agree to declare any appearance or part ofan appearance of the respondent before the Com mittee to be withoutprejud ice . In such a case:

The evidence presented or the discussions at such appearance or part ofthe appearance will not be recorded;the discussions between the Investigating Comm ittee and the respondentwill not be used in evidence against the respondent; andthe respondent and the In vestigating Com mittee may agree that therespondent would not be assisted or represented by any other person.

The Investigating Comm ittee shall not be obliged to disclose the source of acomplaint.If, in the course of its investigations, the respon dent adm its to the InvestigatingCom mittee that the respondent is guilty of improper conduct and theInvestigating Comm ittee and the respo ndent agree on a punishm ent to beimposed for such improper conduct, or if it appears to the InvestigatingCom mittee be appropriate, the Investigating Com mittee may recomm end tothe Board that a specific sanction is imposed on, and the paym ent of a specificamount in costs is required from , the respon dent and that the n ame of,charge(s) against and finding in respect of the respond ent is published by theBoard or not.

Section 9(n) read with the Board s resolutions on 20 June 2006ection 48(5)(a)(ii) and (iii)


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STAATSKOERANT 29 JUNlE 2007 No 3 4 19

RECOMM ENDATION TO DAC3 5 Afte r investigating the allegations of improper conduct against the respondent,

the inve stigating Committee:3 5 1 shall report and recommend to the Disciplinary A dvisory Comm ittee

whe ther or not the respondent should be charged with improper conduct.I3If the Investigating Committee recommends to the Disciplinary AdvisoryCom mittee that the respondent should not be charged with improperconduct, it should state its finding whether:

the respondent is not guilty of im proper conduct; orthere is a reasonable explanation for the respondent s conduct; orthe conduct of which the respondent may be guilty is of negligiblenature or consequence; orthere are no reasonable prospects of success to succeed with a chargeof improper conduct against the respondent; orin all the circum stances it is not appropriate to ch arge the respondentwith improper conduct; and

3 5 2 may make a recommendation under 3.4 to the Disciplinary A dvisoryCommittee.

4 DECISION W HETNE R TO CHARG E A REGISTERE D AUDITOR W ITHIMPROPER CO NDUCT

4 1 When the Disciplinary Advisory Committee receives a recommendation under3.5 from the Investigating Com mittee, it shall consider this and:

Section 48 7) read with the Board s resolutions on 20 June 2006


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4 1 1 if the Investigating Committee recommended that the respondent shouldbe charged, shall formally charge the respondent;I4

4 1 2 if the investigating Committee recommended that the respondent shouldnot be charged, the Disciplinary Advisory Committee may:

4 1 2 1 refer the recommendation to be considered by the Board; or4 1 2 2 decline to prefer any charge(s) against the respondent.4 2 Should the Disciplinary Advisory Committee refer the matter to the Board, the

Board may:4 2 1 formally charge the respondent with such charge(s) as it may formulate in

its discretion; or4 2 2 decline to prefer any charge(s) against the respondent.4 3 If the Disciplinary Advisory Committee or the Board, as the case may be,

decides not to charge a respondent whose conduct was the subject of aninvestigation with improper conduct, the Director: Legal or the CEO mustnotify the respondent, and may noti& the complainant, in writing of thisdecision.

4 4 If a respondent is formally charged with any charge(s) of improper conduct,the Disciplinary Advisory Committee shall cause a notification (if applicable)and a charge sheet t be furnished to the respondent by hand (whether byservice by sheriff or on the respondent's legal representatives or otherwise) orby registered mail to the respondent's address or last known address.I6

THE NOTIFIC TION4 5 When a respondent is formally charged with any charge(s) of improper

conduct, such respondent shall receive a notice of the time and place at whicha hearing ofthe charges under Rule 6 and Rule 7 (if applicable) will be

14 Section 49 1) read with the Board s resolutions on 20 June 2006Section 49 1) read with section 19 4) and the Board s resolutions on 20 June 2006

l6 Section 49 2)


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conducted, unless the Investigating Com mittee made a recommendation under3.4.Subject to 6.3.1 I 6.3.12 and 6.4, a hearing under Rule 6 and or Rule 7 isconducted at such time and place as is determined by the Director: Legal orthe CEO.Th e notice shall state:

that, at the hearing under Rule and Rule 7 if applicable), therespondent:

may be assisted or represented by another person in conducting adefence;has the right to be heard;may call witnesses;may cross-examine any person called as a witness by t he pr o formacomplainant;may have access to documents produced n evidence; andmay adm it at any time before the conclusion of the disciplinaryhearing u nder Rule 6 that the respondent is guilty of the charge s)referred to the Disciplinary Comm ittee despite the fact that therespondent denied such charge s) or failed to admit or deny suchcharge s); andwill be regarded as guilty of the charge s) to which the respondentadmitted guilt under 4.7.1.6;

that the respondent must inform the Director: Legal or the CEO at leastone 1 ) month before the date for the hearing under Rule 6 and Rule ifapplicable) is determined under 4.6, or on good cause shown, such shorterperiod as the D irector: Legal or CE O may determine, of the names,physical addresses and postal addresses of any w itness es) that the


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respondent wishes to give evidence at the hearing under Rule and Rule7 if applicable).

SUBPOEN S

4 8 The Director: Legal or the CEO must cause subpoenas in the prescribed formto be served on the witness es), if any, nominated by the respondent and maycause such subpoenas to be served on such witness es), if any, whom the prform complainant and the Disciplinary Committee wish to call.

THE CH RGE SHEET

4 9 A charge sheet may contain more than one charge of improper conduct,whether formulated cumulatively or in the alternative.

4.10 Thechargesheetshall:4.10.1 set out the nature of the charge s);I74.10.2 set out the relevant facts upon which the charge s) are based with

sufficient particularity as to allow the respondent to plead;4 10 3 inform the respondent that the respondent may, n writing, admit or deny

the charge s);I84 10.4 inform the respondent that the respondent may, together with the

admission or denial referred to in 4.10.3, submit a written explanationregarding the charge s);19

4.10.5 inform the respondent of the date by which the respondent must admit ordeny the charge s), which date must give the respondent a reasonabletime but not exceeding 60 days) to respond;20

4.10.6 inform the respondent that:

Section 49 3) a)ection 49 3) b)

19Section 49 3) c)Section 49 3) d)


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4.10.6.1 should the respondent not adm it or deny the charge(s) by the datereferred to in 4.10.5, the responde nt would be considered to havedenied those charge(s) and that those charg e(s) would be referred to adisciplinary hearing under Rule 6; orshould the respondent deny the charge(s), but fail to submit a writtenexplanation, together with the denia l, the charge (s) would be referredto a disciplinary hearing under Rule without such an explanation;

4 10 7 inform the respondent that section 5 l(4) of the Act provides that arespondent may be ordered to pay the reasonable costs incurred by theInvestigating Co mm ittee and the Disciplinary C omm ittee in connectionwith an investigation and hearing and that a failure to submit a plea under4.10.3 or a w ritten explanation under 4.10.4 may increase the costs likelyto be incurred by the Disciplinary Com mittee.

MENDMENT OF CH RGE SHEET PRIOR TO HE RING4.11 The D isciplinary Advisory Co mm ittee may at any time after a charge sheet or

amended c harg e sheet was furnished to a respondent under 4.4 and before thecomm encem ent of a hearing under Rule further amend such charge sheet oramended charge sheet. Am endm ents may include, but are not limited to, theaddition or deletion of charges.

4.12 The am endm ent shall be effected by furnishing an amended charge sheetwhich m eets the requirements set out in 4.10 to the respondent under 4.4.

4 13 The provisions of Rule 5 apply mut tis mut ndis to a respondent after receiptof an amended charge sheet even if the respondent has pleaded to the originalcharge sheet.

5 THE PLE ND CONSEQUENCES OF N DMISSION OR DENI L OFGUILT

2 The powers o f he Disciplinary Committee to amend a charge sheet is dealt with in 6 3 8


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A respondent that is formally charged must in writing plead to all of thecharges before or on the date referred to in 4.10.5.Should the respondent not plead to the charg e(s) before or on the date referredto in 4.10.5, the respondent will be considered to have denied the charge(s)and such charge(s) w ill be referred to a hearing on the m erits under Rule 6.If a respondent pleads guilty to the charge (should th ere be only one), or all thecharges (should there be m ore than one), contained in the charge sheet, therespondent m ust notify the D irector: Legal or the CEO . n such a case, therespondent is considered to be guilty of that ~ h a r ~ e ( s ) ~ ~nd:

if the Investigating Comm ittee has recommended that a specific sanctionis imposed on, the payment of a specific amo unt in costs is required from,and a specific arrangement regarding publication is made with respect to,a respondent, the Director: Legal or the CEO w ill automatically imposethat sanction on the respondent, order the respondent to pay that amou ntin costs and implement that arrangement with regard to publication23;if the Investigating Co mm ittee did not recommend that a specific sanctionis imposed on, and the payment of a specific amount in costs is requiredfrom, a respondent, the matter will be referred to the DisciplinaryComm ittee to act under Rule 7 at the hearing determined under 4.6.

If a respondent pleads guilty to one or m ore, but not all, of the charges in thechar ge sheet (should there have been m ore), the respondent must notify theDirector: Legal or the CEO, clearly indicating in respect of which charge(s)the respondent adm its and denies guilt.If a respondent denies g uilt to one or m ore of the ch arges in a charge sheet,and the Investigating Comm ittee has made no recommendation under 3.4, thatcharge(s) to w hich such respondent has denied guilt will be referred to theDisciplinary Comm ittee for a hearing on the merits under Rule 6 unless the

Section 49 4)See th Board s Resolutions on 20 June 2006 and the resolution of the Disciplinary Committee on 6 September2006


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STAATSKOERANT 29 JUNlE 2 7 No. 3 4 25

charge sheet is amended by the DAC under 4.1 to remove the charge s) towhich the respondent denied guilt. The respondent will be considered to beguilty of those charg es to which the respondent admitted guilt, which will bereferred to the D isciplinary Com mittee to act under Rule 7.If a respondent d enies guilt to one or m ore of the charg es in a charge sheet,and the Investigating Com mittee has made a recommendation under 3.4:

the D isciplinary Advisory Com mittee may e xercise its powers under 4.1 1,in which case 4.12 and 4.1 will app ly mutatis mutandis Should there beno charge s in the charge sheet, a s amen ded, to which the respondentpleads not guilty, the charge s to which the respondent pleaded guilty arereferred to the CE O or the Director: Legal to act in term s of 5.3.1;if the Disciplinary Advisory Com mittee do es not exercise its powersunder 4.1 1, or if espite its exercise of its powers under 4.1 1 here arecha rges in the charge sheet as amended to which the respondent pleadsnot guilty, 4.5 to 4.8 will apply mutatis mutandis and all charge s) in thecharge sheet will be referred to the Disciplinary Com mittee. Thatcharge s) to which the respondent denied guilt will be referred for ahearing on the merits under Rule 6. The respondent w ill be considered tobe guilty of those charges to which the respondent adm itted guilt, whichwill be referred to the Disciplinary C omm ittee to act under Rule 7.

6 THE HEARING ON THE MERITS

6 1 General matters

6 1 1 The D isciplinary Com mittee may upon good cause shown and in theinterests ofjustice sanction or condone any departure from these Rules orfrom the strict rules of evidence which is not prohibited by the A ct.Unles s any departure from these Rules o r from the strict rules of evidenceis raised at a hearing, it shall not be necessary for the DisciplinaryCom mittee formally to sanction or condone such departure and suchdeparture shall not in and of itself invalidate any action or decision taken,or purportedly taken, under these R ules.


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If a respondent who is formally charged with any charge (s) of improperconduct under 4 1 1 or 4.2.1, does not in writing adm it or deny thecharge(s) before or on the date referred to in 4.10.5 or should thatrespondent deny the charge (if there is only one or) or one or mo re of thecharg es (if there are mo re than one), the Director: Leg al or the CEO shallrefer the charge(s) which w ere denied or to which the respondent did notplead, together with the plea and w ritten explanation if any) to theDisciplinary Comm ittee for a hearing under this Rule, subject to 5.5 and5 6

Pursuant to a referral under 6.1.2, the Director: Legal or the CE O shallappoint any person ( the pro forma complainant ), in his or herdiscretion, to present the charge(s) to the D isciplinary Com mittee at thehearing under this Rule and under Rule 7 (if any). The pro formacomplainant may be assisted by one o r more persons with legal orauditing experience.

ocuments to be adduced in evidence

Th e Director: Legal or the CEO shall cause bundles of documents to beadduced in evidence in the hearing under this Rule and under Rule 7 (ifany) to be distributed to such membe rs of the Disciplinary Comm itteewho indicated that they would a ttend the hearing unde r this Rule, to therespondent and to the pro forma complainantThe bundles shall comprise:

the notice and charge sheet(s) sent to the responde nt under 4.4;any plea(s) and written explanation(s) furnished by the respon dent;any documents which the pro forma complainant and the respondentmay agree are admissible in evidence;at the discretion of the pro forma complainant, a certified copy of therecord of the trial and conviction of the respondent if the respondentis charged with improper conduct which am ounts to the offence of


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which the respondent w as convicted, unless the conviction has beenset aside by a superior court.

Nothin g in 6.2 shall prevent any evidenc e not included in any bundlereferred to n those sub-ru les from being addu ced at the hearing under thisRule or Rule 7

The conduct of the hearingShould the respondent not be present at the place and time for the hearingdetermined under 4.6 and still not be present within thirty 30) minutesfrom the time set for the start of the hea ring, the hearing under this Ruleand Rule 7 (if any) may proceed n the respondent's absence if theDisciplinary Com mittee is satisfied that the notice under 4.4 was servedon the respondent by hand (whether by service by sheriff or otherwise) orby registered mail.This R ule shall apply mututis mut ndis to the situation where a hearingproceeds in a respondent's absence.If a registered auditor is not present at a hearing , a registered auditor mayonly be represented by another person at the hearing if the registeredauditor has authorised such person in w riting to do so.Any application for the hearing under this Rule, or any part of thehear ing, to be held in c mer shall be brought at the outset of the hearingunless the chairperson of the D isciplinary Com mittee determines~ t h e r w i s e . ' ~Any witness at a hearing shall give evidence after the chairperson of theDisciplinary Com mittee or a person designated by him or heradmin istered an oath or affirm ation to such w itness.The order of procedure at a hearing under this Rule shall be as foIlows:

2 ection 50 4) provides that a hearing before the D isciplinary Committee is open to the public except where, in theopinion of the chairperson of the Disciplinary Committee, any part of the hearing should be held in camera


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6 3 6 1 The chairperson of the Disciplinary Committee shall read the noticeand charge shee t referred to in 4.4 to the responden t, unless therespondent agrees to dispense with the reading of such notice andcharge sheet.The chairperson of the Disciplinary Co mm ittee shall ask therespondent to confirm which of the c harges set out n the chargesheet or in the charge sheet as amende d) the respondent admits ordenies, provided that the Disciplinary Committee shall not ask suchconfirmation with respect to any charge s) that the respondent mayhave admitted under 5.3.The respondent will be considered to be guilty as charged to anycharg e s) to which such responden t admits guilt under 6.3.6.2 andsuch charge s) will be heard by the Disciplinary Committee underRule 7.Should the respondent not admit or deny the charge s) when asked todo under 6.3.6.2 or should it appear to the Chairperson that therespondent may adm it the facts but may not adm it the cha rge s) orshould the respondent not be present at the hearing under this Rule,the respondent will be considered to have denied the charge s).T h e p r oforma complainant shall state his or her case with regard tothe charge s) denied under 6.3.6.2 and 6.3.6.4 and produce evidencein support of it.The respondent may cross-examine any witnesses produced by thep ro forma complainant and may have acce ss to any documentsadduced in evidence by the proforma complainant.The pro forma complainant may re-examine any witnesses cross-examined by the respondent.At the conclusion of the case presented by the p r oformacomplainant, the respondent shall state the case with regard to the


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charge s) denied under 6.3.6.2 and 6.3.6.4 a nd produce e vidence insupport of it.

6.3.6.9 The pr o forma complainant may cross-examine any witnessesproduced on behalf of the responden t including the responden tregistered a uditor if that registered auditor has elected to giveevidence) and may have access to any docum ents adduced inevidence by the respondent.

6.3.6.10 The respondent may re-examine any witnesses cross-examined bythe p r o orma complainant.

6.3.6.11 At the conclusion of the case presented by the respondent,i) the pr o fornza complainant may a ddress the Disciplinary

Committee on the ca se generally;ii) the respondent may reply to th e pr o form a complainant; andiii) thepro form a complaina nt may reply to any new matter raised

by th e respondent.Th e Disciplinary Committee shall not hear any further evidence from thep r o form a complaina nt or from the respondent after the conclusion oftheir case unless the interests of jus tic e so dictates, in which c ase 6.3.6.5to 6.3.6.1 shall apply muta tis nzutandis.The Disciplinary C ommittee may at any time after the pr o formacomplainan t started to state his or her ca se and prior to the conclusion ofthe hearing under this R ule amend the charge she et in accordance withsection 50 3) afler which it may regulate its proceedings as it deems fit nthe interests o f justice.25The respondent may at any time after the pro form a complainant startedto state his or her cas e and prior to the conclusion o f the hearing underthis Rule adm it guilt to any charge s) which has not previously beenadmitted, upon which such respondent will be considered to be guilty of


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such charge(s). Such charge(s ) will be heard by the DisciplinaryCommittee under Rule 7. The Disciplinary Com mittee may regulate itsproceedings with respect to any remaining ch arge(s) to which guilt hasnot been admitted as it deems fit in the interests ofju stice .The pr form complainant may , with the leave of the DisciplinaryCom mittee, at any time after he or she started to state his or her case andprior to the conclusion of the hearing withdraw any charge(s) against therespondent. The Disciplinary Comm ittee may regulate its proceedingswith respect to any rem aining charge(s) as it deems fit in the interests ofjustice.If the Disciplinary Com mittee is not seized o f any further charge(s) as aresult of an admission under 6.3.9 or a withdrawal under 6.3.10, and if therespondent is guilty of any charge(s) under section 4 9 4 1 ~ ~r section50(8)(b)(ii12 , the Disciplinary Committee shall proceed to hear suchcharge(s) of which the respondent is guilty under Rule 7, or, inexceptional circumstances, shall determine anew a place and time (notmo re than 30 days from the date of the announcemen t) at which theDisciplinary com mittee will hear such charge(s) under Rule 7Th e Disciplinary Com mittee may at any time after the commen cementand before the conclusion of the hearing order the postponement of theremainder o f the hearing under this Rule to a time and place determinedor to be determined in its discretion, provided that only members presentat the commenc ement of the hearing under this Rule may take part in theremainder o f the hearing under this Rule.The Disciplinary Co mm ittee may at any time after the comm encementand before th e conclusion of the hearing under this Rule call a s a witnessany person the evidence ofwhom it considers material and who has not

5 See also 4.126 This is the case when a registered auditor admitted guilt to one or more charges in a reply t o the charge sheet beforea hearing.7 This is the case when a registered auditor admitted guilt to one o r more charges at a hearing on the merits of thematter.


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STAATSKOERANT 9 JUNlE 2007 N o . 3 4 31

been called by the pro forma complainant or the respondent. TheDisciplinary Committee may regulate its proceedings with respect to thecross-examination of such witness and the right to address theDisciplinary Committee on the evidence given by such witness as itdeems i t in the interests ofjustice.

Any member of the Disciplinary Committee taking part in the hearingunder this Rule may, with the permission of the chairperson of theDisciplinary Committee, put a question to any witness, to the respondentregistered auditor if such registered auditor elected to give evidence), totheproforma complainant and to the legal representative of therespondent registered auditor if any).

The Disciplinary Committee may make any decision with regard to anymatter arising in connection with, or in the course of a hearing under thisRule, in camera.

Conclusion of hearing under this RuleAt the conclusion of a hearing under this Rule, the chairperson of theDisciplinary Committee shall announce when and i n which manner theDisciplinary Committee will inform the respondent of its finding as to the guiltor innocence of the respondent on the charge s) with which the DisciplinaryCommittee is still seized at the conclusion of the hearing under this Rule. TheDisciplinary Committee may inform the respondent of its finding on the day ofthe hearing under this Rule or, in exceptional circumstances, later, but in anyevent not more than 3 days28after the conclusion of the hearing under thisRule.

7 . HEARING ON SENTENCING ~7 . 1 Application of this rule

' ee sect ion 51(1 )9 It is envisag ed that a hearing on the merits and on sentencin g would no rmally take place at the same time. Inexceptional circumstances, however, the D isciplinary Committee may determine otherwise: see 6.3.11 .6.3.12 and 6.4


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This rule does not apply when a respondent adm itted guilt to the charge(should there be only one), or all the charges (should there be more thanone), contained in the charge sheet, and the Director: Legal or the CE Oautomatically imposed a sanction on the respondent under 5 .3.1~ .Subject to 7.1.1, this rule applies when a respondent is found guilty of anycharge(s) under section 49(4)3 , 50 (8 )(b )(i i)~ ~r 5 ( ~ ) ( a ) ~ ~egardless ofwheth er a hearing under Rule 6 took place.

Hearing under this Rule when a hearing under Rule 6 took placeIf a respondent is found guilty of a charge(s) under section 49(41~~,50(8) (b ) ( i i )~~r 5 1 ( 1 ) ( a ) ~ ~nd a hearing under Rule 6 took place, theDisciplinary Comm ittee will hold a hearing under this Rule:

at the time and place appointed by the chairperson of the DisciplinaryComm ittee under 6 3 1 or 6.4;as a continuation of the hearing under Rule 6; and

with only such m embers of the Disciplinary C omm ittee as took part in thehearing under Rule 6 taking part in the hearing under this Rule.Hearing under this Rule when a hearing under Rule 6 did not take place37The provisions of this sub-Rule 7 3 apply only if a respondent is guilty of acharge(s) and a h earing under Rule 6 did not take place. In such a case,

j See the Bo ard s Resolutions on 2 June 2006 and the resolution of the Disciplinary Comm ittee on 16 Septem ber2006This is the case when a registered auditor admitted guilt to one or more charges in a reply to the charge sheet beforea hearing.This is the case when a registered auditor admitted guilt to one or more charges at a hearing on the m erits of thematter.

his is the cme when t he Discip linary Committe e finds a registered auditor guilty after a hearing on the merits ofthe matter.I See fn 3 above.

See fn 32 above.I se e fn 33 above.37 This is the case when a registered auditor admits guilt to the charge (should there e only one), or all the charges(should there be more than one), contained in the charge sheet and the Investigating Committee did not recommendthat a specific sanction is imposed.


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the Director: Legal or the CEO may appoint a p r o orma complainant, inhis or her discretion, to present any ag gravating or m itigatingcircumstances to the Disciplinary Co mmittee at the hearing under thisRule. The pr fornia complainant may be assisted by o ne or morepersons with legal or auditing experience;the D isciplinary Comm ittee conducts the hearing under this Rule at suchtime and place as is determined by the D irector: Legal or the CEO under4.6.

General pow er relating to hearing under Rule 7The Disciplinary Committee may upon good cause shown and in the interestsof justice sanction or condone any departure from these Rules or from thestrict rules o f eviden ce which is not prohibited by the Act. Unless anydeparture from these Rules or from the strict rules of evidence is raised at ahearing, it shall not be necessary for the Disciplinary Committee formally tosanction or condone such departure and such departure shall not in and ofitself invalidate any action or decision taken, o r purportedly taken, under theseRules.he conduct o f the hearing

Should the responden t not be present at the place and time for the hearingdetermined under 6.3.1 I 6.4 or 7.3.2 and still not be present w ithin thirty30) minutes from the time set for the start of the hearing, the hearing

under this Rule may proceed in the respondent s absence, provided that ifthe place and time for the hearing was determined under 7.3.2, the hearingunder this Rule may only proceed in the respondent s absence if theDisciplinary Comm ittee is satisfied that the notice under 4.4 was servedon the respondent by hand (whether by service by sheriff or otherwise) orby registered mail.This Rule shall apply mutatis mutandis to the situation where a hearingproceeds n a respondent s absence.


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7.5.3 If a registe red audito r is not present at a hearing , a registered audito r mayonly be represented by another person at the hearing, if the registeredauditor has authorised such person n writing to do so.Any application for the hearing under this Rule, or any part of thehearing, to be held in c mer shall be brought at the ou tset of the hearingunless good cau se, in the opinion of the chairperson of the D isciplinaryCommittee, is shown.38Any w itness at a hearing shall give evidence after the chairperson of theDisciplinary Committee or a person designated by him o r heradministered an oath or aff~rmationo such witness.

7.5.6 Th e order of procedure at a hearing un der this Ru le shall be as follows:7.5.6.1 The chairperson of the Disciplinary Comm ittee shall read the

charge s) of which the respondent are guilty, unless the respondentagrees to dispense with the reading of the charge@ ).The pro form complainant shall state his or her case with regard tomitigating or aggravating circumstances in respect of the charge s) ofwhich the responden t are guilty and produce evidence in support of itif any).

7.5.6.3 The responden t may cross-examine any w itnesses produced by thepro formn complainant and may have access to any docum entsadduced in evidence by the pro formn complainant.The pro form complainant may re-examine any witnesses cross-examined by the respondent.At the conclusion of the case presented by the pro formncomplainant, the respon dent shall state the case with regard tomitigating or aggravating circumstances in respect of the charge s) of

Section 50 4) rovides that a hearing before th Disciplinary Committe e is open to the public except where, in theopinion of the chairperson of the Disciplinary Committee, any part o f the hearing should be held in camera


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S T A A T S K O E R A N T , 9 JUNl 2 7 No 3 4 35

which the respondent are guilty and produce evidence in support of itif any).

The pro forma complainant may cross-examine any w itnessesproduced on behalf of the respondent including the respondentregistered auditor if that registered auditor has elected to giveevidence) and may have access to any documents adduced inevidence by the respondent.The respondent may re-examine any witnesses cross-examined ythe pro forma complainant.At the conclusion of the case presented by the respondent,

i) the pro fornza complainant may address the DisciplinaryCommittee with respect to mitigating or aggravatingcircumstances;

ii) the respondent may reply to the pro forma complainant; andiii) the pro forrna complainant may reply to any new matter

raised by the respondent.The D isciplinary Com mittee shall not hear any furthe r evidence from thepro forma complainant or from the respondent after the conclusion oftheir case on mitigating or aggravating circumstances unless the interestsof justice so dictate. in which case 7.5.6.2 to 7.5.6.8 shall apply mutatismutandisTh e Disciplinary Com mittee may at any time after the comm encementand before the conclusion of the hearing und er this Rule order thepostponement of the rem ainder of the hearing under this Rule to a timeand place determined or to be determined in its discretion, provided thatonly m embers present at the comm encement o f the hearing under thisRule may tak e part in the remainder of the hearing under this Rule.


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S T A A T S K O E R A N T , 29 JUNlE 2 7 No 3 4 37

8 .1 If a respondent is found guilty of a charge of improper conduct, on e or more ofthe following sentences may be imposed under 5.3.1 or 7.6 with respect toeach charge of which the respondent is found

8 .1 I a caution or reprimand; and8 .1 .2 a fine which shall not exceed either R l 0 0 000 or such higher amount as

may be applicable from time to time under section 5 (3)(a)(ii); anda suspension of the right to practice as a registered auditor for a specificperiod; andthe cance llation of the registration of the respondent with the Board andthe removal of the name of the respondent from the registe r referred to insection 6

8.2 sentence under 8.1 may be suspended for a specific period and or madesubject to any lawful conditions set in the sentence.

8.3 If a respondent is found guilty of a charge of im proper conduct, an order madeunder 5.3.1 or 7 6 may include:

that the name of the respondent; and orthe nam e of the respondent s irm (if applicable); and orthe charge against and finding in respect of the respondent; and orany other information that is considered appropriate

is published by the Board or not, as the case may be.48.4 A respondent:8 .4 .1 upon whom a sanction was imposed under 5 3 1 r;8.4.2 whose conduct was the subject of a hearing under Rule 64 See section 5 3) a)4 Section 51 5)


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38 No. 30004 GOVERNMENT GAZETTE 29 JUNE 2007

may be ordered to pay such reasonable costs as have been incurred by theInvestigating Committee and the Disciplinary Committee in connection withthe investigation and hearing in question or such part thereof as may beconsidered just.

Legislative Acts - Auditing Profession Act 26 of 2005 - New Disciplinary Rules

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Transcript of Legislative Acts - Auditing Profession Act 26 of 2005 - New Disciplinary Rules