CEO

ISSUE4

November 2007

MESSAGE FROM THE

First Board meeting held

On Thursday 17 May 2007 Dines Gihwala was dulyelected as Chairman of the Independent RegulatoryBoard for Auditors (IRBA) as constituted under theprovisions of the Auditing Profession Act (APA), Act No.26 of 2005.

Dines is the Chairman and Senior Partner of Hofmeyr,Herbstein & Gihwala Inc, one of South Africa’s largestlegal firms, and we are very pleased to have him serveas the new Chairman of the Board.

Audit Technical 3

SMEs 5

Public Sector 6

Regulated Industries 7

Ethics 10

Practice Review 12

Legal 13

Registry 25

IRBA InformationSessions 29

Ethic SA 31

Obituary: DM Atherstone 31

MESSAGE FROM THE CEO

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CONTINUED

The APA stipulates that the Board’smembership should include individualswho are not members of the auditingprofession. The APA requires that amaximum of four positions are to be heldby Registered Auditors (RAs), while theother six positions must be held by non-RAs.

It is vital that the IRBA is, and is seen tobe, independent of the profession. Theinclusion of non-RA members on theBoard will go a long way to achievingthis. All the members of the new Boardhave been appointed on the premisethat they are competent individuals withthe relevant knowledge, experience andability to contribute to setting the strategicdirection for the IRBA.

The focus areas that the chairman hasidentified for his term of office, in nospecific order of priority, are:-

1. Transformation of the profession withspecial emphasis to retain newlyqualified RAs from historicallydisadvantaged communities in theprofession;

2. Restoring the reputation andcredibility of the profession as a wholewhich was unfairly tainted as a resultof the various business and auditfailures internationally and locally;

3. Promoting the interests of theprofession in the context of thecorporate law reform programme;and

4. Ensuring that the APA is implementedand honoured in spirit and in law.

The APA sets out the IRBA’s role asfollows:

“To promote the integrity of the auditingprofession including investigating allegedimproper conduct, conductingdisciplinary hearings, and imposingsanctions, conducting practice reviewsor inspections; to take steps to protectthe public in their dealings with RAs; toprescribe the standards for professionalcompetence, ethics and conduct of RAs;to encourage education in connectionwith the auditing profession; and toprescribe auditing standards.”

We are confident that the new Boardwill fulfil its role with the requireddedication and commitment.

Other members of the new Boardappointed by the Minister of Financeare:Ms Linda De Vries (Deputy Chairman);Ms Gill MarcusMr Jacob ModiseMr Themba ZakuzaMs Grathel MotauMr Sipho SonoMr Wynand du PlessisMr Deepak NagarMs Cathryn Emslie

The Accountant General, Mr. FreemanNomvalo, is the Minister’s representativeon the IRBA.

While we are very proud and excited tobegin a new era with the new Board,we must once again thank the previouschairman, Deepak Nagar, and his Board,for their wisdom and guidance duringthe transition period from the PAAB toIRBA.

Further detail on the transition and theimplementation of the APA can be foundin the first IRBA Annual Report, which isnow available.

Kariem HoosainCEOTelephone: (011) 622-8533Facsimile: (011) 622-4029E-mail: khoosain@irba.co.za

Exposure Draft of proposed ISA

ISA 510 (Redrafted), Initial Audit Engagements - Opening Balances

ISA 530 (Redrafted), Audit Sampling and Other Means of Testing

ISA 700 (Redrafted), The Independent Auditor's Report on General Purpose FinancialStatements

ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor'sReport

ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter(s)Paragraphs in the Independent Auditor's Report

ISA 800 (Revised and Redrafted), Special Considerations - Audits of Special Purpose FinancialStatements and Specific Elements, Accounts or Items of a Financial Statement

ISA 805 (Revised and Redrafted), Engagements to Report on Summary Financial Statements

ISA 220 (Redrafted), Quality Control for Audits of Historical Financial Information

ISQC 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of HistoricalFinancial Information, and Other Assurance and Related Services Engagements

ISA 505 (Revised and Redrafted), External Confirmations

ISA 620 (Revised and Redrafted), Using the Work of an Auditor’s Expert

Comment Due Date

15 October 2007

15 October 2007

15 November 2007

15 November 2007

15 November 2007

15 November 2007

15 November 2007

15 December 2007

15 December 2007

4 February 2008

4 February 2008

To enhance the quality and consistency ofaudits, the International Auditing andAssurance Standards Board (IAASB), anindependent standard-setting board underthe auspices of the International Federationof Accountants (IFAC), is continuing toadvance its project to clarify its auditingstandards. The standards below have beenredrafted in accordance with the IAASB'snew drafting conventions designed toenhance the clarity of its pronouncementsAt its meetings in July and October 2007,the IAASB approved for public commentthe following exposure drafts of proposedInternational Standards on Auditing (ISA):

ISA 705 - Modifications to the Opinionin the Independent Auditor's Report

ISA 705 has been revised and redraftedfrom the exposure draft ISA 705 issued inMarch 2005 and was exposed forcomment in accordance with the IAASB’snew drafting conventions designed toenhance the clarity of its pronouncements.

ISA 706 - Emphasis of Matter Paragraphsand Other Matter(s) Paragraphs in theIndependent Auditor's Report

ISA 706 has been revised and redraftedfrom the exposure draft ISA 706 issued inMarch 2005 and was exposed forcomment in accordance with the IAASB’snew drafting conventions designed toenhance the clarity of its pronouncements.

ISA 800 - Special Considerations - Auditsof Special Purpose Financial Statementsand Specific Elements, Accounts or Itemsof a Financial Statement

ISA 800 has been revised and redraftedfrom the exposure draft ISA 701 issued inJune 2005 and was exposed for commentin accordance with the IAASB’s newdrafting conventions designed to enhancethe clarity of its pronouncements.

ISA 805 - Engagements to Report onSummary Financial Statements

ISA 805 has been revised and redraftedfrom the exposure draft ISA 800 issued inJune 2005 and was exposed for commentin accordance with the IAASB’s newdrafting conventions designed to enhancethe clarity of its pronouncements.

ISA 505 - External Confirmations

ISA 505 has been revised and redraftedin accordance with the IAASB’s newdrafting conventions designed to enhancethe clarity of its pronouncements

ISA 620 - Using the Work of an Auditor’sExpert

ISA 620 has been revised and redraftedin accordance with the IAASB’s new

drafting conventions designed to enhancethe clarity of its pronouncements

The following standards have not beenrevised, but are only exposed for commentin accordance with the IAASB’s claritydrafting conventions:

ISA 220 - Quality Control for Audits ofHistorical Financial Information,

ISA 510 - Initial Audit Engagements -Opening Balances,

ISA 530 - Audit Sampling and OtherMeans of Testing,

ISA 700 - The Independent Auditor's Reporton General Purpose Financial Statementsand

ISQC 1 - Quality Control for Firms thatPerform Audits and Reviews of HistoricalFinancial Information, and Other Assuranceand Related Services Engagements

How to comment:

The Committee for Auditing Standards(CFAS) of the Independent RegulatoryBoard for Auditors (IRBA) invitescomments on the proposed ISAs. Thedeadlines for comments to the CFAS onthe proposed new ISAs were as follows

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AUDIT TECHNICAL

IAASB MAKES FURTHER PROGRESS ON CLARIFICATION OFITS AUDITING STANDARDS

4

AUDIT TECHNICALCONTINUED

COMMENT LETTERS SUBMITTED TO IFAC

From June to September 2007, the CFAS submitted comment letters to the IAASB in relation to the following proposed InternationalStandards on Auditing (ISA):

ISA 200, Overall Objective of the Auditor, and the Conduct of an Audit in Accordance with International Standards on Auditing;

ISA 250, Laws and Regulations;

ISA 260, Communication of Audit Matters with those Charged with Governance;

ISA 500, Considering the Relevance and Reliability of Audit Evidenc;

ISA 550, Related Parties;

ISA 510, Opening Balances, and

ISA 530, Audit Sampling and Other Means of Testing.

The coment letters are available on the IRBA website at www.irba.co.za

COMPANIES BILL – REVISED TIMEFRAMES

The Department of Trade and Industry has announced revised timeframes for the Corporate Law Reform process:

Finalisation of the updated Companies Bill, 2007, following public comments: August 31, 2007;

Submission of the Bill to the State Law Advisors for certification: September 10 , 2007;

Submission of the Companies Bill to Cabinet for approval to introduce the Bill into Parliament: October 31, 2007;

Introduction of the Bill in Parliament: February, 2008;

Enactment of the Bill: July, 2008;

Promulgation of the Bill: November/December 2008;

Implementation of the New Companies Act: January 1, 2010.

IAASB ISSUES INTERNATIONAL STANDARDS ON AUDITINGIN TERMS OF THE CLARITY DRAFTING CONVENTIONS

The IAASB released ISA 600 (Revisedand Redrafted), Special Considerations- The Audit of Group FinancialStatements (Including the Work of

Component Auditors) in October 2007,to assist the group engagement partnerin taking responsibility for the direction,supervision and performance of the

group audit and the issue of an auditor'sreport that is appropriate in thecircumstances.

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The CFAS released an exposure draft of a proposed guide, Auditor Attending the Annual General Meeting, forcomment. The closing date for comments is 15 February 2008.

The invitation to comment and Exposure Draft are available on the IRBA website at www.irba.co.za

CFAS EXPOSURE DRAFTS RELEASED FOR COMMENT

ISSUE OF SA GAAP FOR SMES

SMEs

The South African Statement ofGenerally Accepted Accounting Practice(GAAP) for Small and Medium-sizedEntities (SMEs) (the Statement), wasissued on 4 October 2007.

The Accounting Practices Board (APB)approved the issue of the Statement inresponse to market needs anddifferential reporting allowed by theCorporate Laws Amendment Act, 2006(CLAA).

The Statement may be used bycompanies defined as 'limited interest'in the CLAA and other entities with nopublic accountability. These companiesand entities will now have a choice ofreporting in terms of the Statement ofGAAP for SMEs or in terms of IFRS.

A company that will qualify as a 'limitedinterest company' in terms of the CLAAmay apply the Statement even thoughthe CLAA has not been given aneffective date, (assuming the scoperequirements in Section 1 of theStatement are met) and still be incompliance with the Companies Act

No. 61 of 1973. The reason being thatthe Statement forms part of 'Statementsof GAAP as approved by the APB', asreferred to in paragraph 5 of Schedule4 of the Companies Act.The Statement is effective and can beused immediately.

Circular 9/2007 - Statement of GAAPfor SMEs, was also issued to providemore detail in terms of the applicationof the Statement. The circular addressesthe following areas:

• Current and future classifications ofcompanies in the context of thecorporate law reform process;

• The scope and effective date of theStatement;

• Financial reporting frameworks for'limited interest companies';

• Development of the Statement;• Some areas to be aware of in

applying the Statement; and• Audit reporting considerations.

A document outlining frequently askedquestions (FAQs) has been preparedto provide answers to questions that are

expected to arise with the applicationof the Statement. The list of questionswas compiled from the commentsreceived at 10 discussion forums heldaround the country.

To view a complete section outlining allthe available information on theStatement of GAAP for SMEs, pleasevisit the SAICA website atwww.saica.co.za

AUDIT TECHNICALCONTINUED

General directive(notice number 645)

The directive confirms that the AG hasopted not to perform any audits ofinstitutions referred to in section 4(3) ofthe PAA for the 2007-8 financial year(mainly any public entities listed in thePublic Finance Management Act wherethe AG is not already performing theseaudits). Auditees have been requestedto appoint their own auditors in line withthe prescribed consultation process withthe AG.

The directive has also laid out the PAArequirements that registered firms ofauditors should comply with in respectof the audits that the AG opted not toperform at this time.

Auditing of performance information(notice number 646)

The directive spells out the phasing-inapproach that will be followed to complywith the requirements of section 20(2)(c) and section 28(1) (c) of the PAA.These sections relate to auditing ofperformance information. The approachshould be followed in audits of all entitiesin the 3 spheres of government.

Reporting and auditing frameworks -Public Finance Management Act(no. 647)

International Standards of Auditing shallbe applied for all regularity auditsconducted by the AG until further noticeto the contrary.

The directive sets out the bases ofaccounting which he has recognised asprescribed by the National Treasury. Thebases are set out at the end of this section.

The specimen financial statements andguide for the preparation of the annualreport are available on the Office of theAccountant-General website(www.treasury.gov.za)

Unlisted entities reporting frameworks(notice number 648)

The notice provides accounting and auditreport guidelines for public entities notlisted in terms of PFMA. Attached to thenotice are two circulars, Audit Circular1 of 2005 and 1 of 2007, issued by theAG.

PUBLIC SECTOR

THE AUDITOR GENERAL ISSUES DIRECTIVE

The Auditor-General (AG) has issued the following general notices relating to the Public Audit Act, 2004 (PAA) through theGovernment Gazette No. 29919, dated 25 May 2007:

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AG audit fee payment policy

The attention of registered firmscontracted to perform auditengagements on behalf of the Auditor-General (AG) is drawn to the AuditorGeneral audit fee payment policyregarding audit fees payments from theAG:

The AG payment policy is on average45 days from the date of statement. In

order to pay registered firms within 45days terms the following should takeplace.

1. Registered firms should forward toaudit Business Units (BU) correctinvoices before the last day of themonth. The invoices should becaptured by the audit BU before theend of the month. Such invoiceswould become due for payment atthe end of the following month.

Invoices that are incorrect will delaycapturing. For example if an invoicefor March has queries and thequeries are not resolved before theend of March this invoice will notbe captured in March. The invoicewill only be paid at the end of Mayif it was captured in April. Thisincreases the average paymentperiod from 45 to 60 days.

AUDITOR GENERAL FEES AND PAYMENTTO REGISTERED FIRMS

Prescribed by

National TreasurySpecimen Fin Statement

National TreasurySpecimen Fin Statement

National Treasury

National Treasury

Basis of preparation

Modified cash basis

Modified cash basis

SA Statement of GAAP withGRAP Standards 1, 2, 3replacing the equivalent GAAP

SA GAAP

Financial year end

31 March

31 March

31 March

31 March

Government sphere

National & Provincial departments

Parliament and provincial legislatures

Public entities – national and provincial(3 A and 3C) and constitutional Institutions

Public entities (schedule 2, 3B and 3 D)and trading entities

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The CFAS issued the following auditreport to the National Credit Regulator(NCR) in terms of Regulation 68 of theRegulations to the National Credit Act,2006, and prescribed in the NCRGuideline 001/2007: AssuranceEngagement - Guide for CreditProviders, issued in September 2007:

• The Report of the IndependentAuditor of Credit Providers to theBoard of Directors and the NationalCredit Regulator in Compliance withRegulation 68 of the Regulations tothe National Credit Act, 2006.

The report is effective for auditors’

reports dated on or after 1 July 2007.The report is available on the IRBAwebsite at: www.irba.co.za.

The NCR Guideline 001/2007 isavailable on the NCR website at:www.ncr.org.za.

REGULATED INDUSTRIES

THE CFAS ISSUES AUDITOR’S REPORT IN TERMSOF THE NATIONAL CREDIT ACT

The Accounting Standards Board (theBoard) has issued five Invitations toComment (ITC) on the directives ontransitional provisions for differentpublic sector entities. The ITCs proposethat transitional provisions be deletedfrom the Standards of GRAP – wherethey are currently included - and insteadbe issued in directives. Transitionalprovisions provide guidance to entitieson the transition from their currentapplied basis of accounting to the basis

prescribed by the Standards of GRAP.

Comments on the 5 directives, listedbelow, were requested by 31 October2007.

• ED 39 - Deletion of TransitionalProvisions from Standards of GRAP

• ED 40 - Directive on TransitionalProvisions for Public Entities

• ED 41 - Directive on Transitional

Provisions for High CapacityMunicipalities

• ED 42 - Directive on TransitionalProvisions for Medium to HighCapacity Municipalities

• ED 43 - Directive on TransitionalProvisions for Parliament

The ITCs are available on the Board'swebsite at www.asb.co.za.

ACCOUNTING STANDARDS BOARD ISSUES ITCSIN TRANSITIONAL PROVISIONS

REGULATED INDUSTRIESCONTINUED

2. At the end of the month, registeredfirms should also submit statementsto the Finance department at theHead office. The statement sentshould contain invoice numbers andamount that correspond with invoice

submitted and captured by the auditBU (as per 1 above). When theinvoices correspond the accountwill be paid in the month thatinvoices are due. Should there beany discrepancy in the captured

invoices by the BU and thestatements, the payment will bedelayed and paid in the followingmonth. For further informationcontact SAICA.

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REGULATED INDUSTRIESCONTINUED

In terms of the Attorneys’ Act, No. 53of 1979 and the Rules of the ProvincialLaw Societies, auditors are required toreport on their audit of attorneys’ trustaccounts by 31 August each year.

The IRBA commenced with the processof updating the current guidancecontained in the SAICA Guide,Guidance for Auditors: The Audit ofAttorneys’ Trust Accounts in terms of theAttorneys’ Act, No 53 of 1979 and theapplicable rules of the Provincial LawSocieties, which guidance wasapplicable to the audits for the yearended 31 August 2008. A consultationprocess is being followed which involvesmeeting with representatives of the Law

Society of South Africa (LSSA), theAttorneys’ Fidelity Fund and therespective Provincial Law Societies andRegistered Auditors in order to identifyamendments required to the guidanceand the Rules of the Provincial LawSocieties.

The need for updating the existingguidance has arisen due to the adoptionof the International Standards onAuditing, new legislation affectingauditors and other developments inreporting standards. The current rulesof the law societies still refer to SouthAfrican Auditing Standards, which werewithdrawn on adoption of theInternational Standards on Auditing.

Please note that the changes to thereport are an interim measure until suchtime as the guidance has been updatedand do not affect either the nature ofthe engagement to audit attorneys’ trustaccounts or the level of assuranceexpressed in the reports.

The Regulated Industry StandingCommittee (RISC), the sub committeeof the CFAS responsible for issuingguidance and auditors’ reports forregulated industries, will update theguidance and audit report over thefollowing twelve months. The report isavailable on the IRBA website atwww.irba.co.za

THE CFAS ISSUES AUDITOR’S REPORT ONATTORNEYS’ TRUST ACCOUNT

In order for an asset manager toadminister the investments of a pensionfund, the asset manager has to registeras an investment administrator with theFinancial Services Board in terms ofSection 13B of the Pensions Act, 1956.In terms of Regulation 32(2)(b) the asset

manager is required to provide a reportfrom their auditors in the form ofSchedule 0.

The report includes some factualinformation but also requires the auditorto certify the following:

• That the bookkeeping, computer andcontrol systems are adequate for thesize and complexity of the businessit is conducting/proposes to conduct.

REPORT FOR PENSION FUNDS INVESTMENTADMINISTRATORS

The Committee for Auditing Standardsissued two auditor’s reports in terms ofthe Further Education and TrainingColleges (FETC) Act, Act No. 16 of2006.

The auditor’s report on the annualfinancial statements of a PFETC isprepared in accordance with theInternational Standards on Auditing(ISA) 700, The Independent Auditor’sReport on a Complete Set of GeneralPurpose Financial Statements. In terms

of Section 28 of the FETC Act, a personproviding further education and trainingother than a public college must beregistered in terms of the CompaniesAct, Act No. 61 of 1973. A privatecollege would prepare the annualfinancial statements in accordance withthe Companies Act and thus the auditorwould have to report in terms of ISA700.

The auditor’s assurance report on theprojection of the PFETC is prepared in

accordance with the InternationalStandard on Assurance Engagements(ISAE) 3400, The Examination ofProspective Financial Information. TheFETC Act and regulations require thePFETC in a start-up phase, without a setof financial statements, to submit aprojection with its application to register,and thus the auditor would have toexamine the projection in terms of ISAE3400.

THE CFAS ISSUES AUDITOR’S REPORT IN TERMS OF THEFURTHER EDUCATION AND TRAINING COLLEGES ACT

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EXCHANGE CONTROL DEPARTMENT OF THESOUTH AFRICAN RESERVE BANK

The Exchange Control department of the South African Reserve Bank (EXCON) has issued the following Exchange ControlCirculars:

No.12/2007 – Authorised Dealer in Foreign Exchange with limited authority. This circular advises that the name of Nedtravel(Pty) Limited in Section A.2(B) of the Exchange Control Rulings (the Rulings) has been deleted and substituted with TourvestFinancial Services trading as American express Foreign Exchange Services.

No.13/2007 – Audit requirements for institutional investors. Subsection B.2(B)(iii)f) has been amended. The sample sizeapplicable to the audit reports for institutional investors will only be based on the last quarter.

No.14/2007 – Securities Control – Authorised Bank. The name “Non-Resident Centre – Johannesburg” has been added tothe list of names under the heading of FirstRand Bank Limited in subsection G.(A)(iii)(j) of the Rulings.

No.15/2007 – Credit and/or Debit Cards. Section B.16(A) relating to credit/and or debit cards authorized for use outsidethe CMA has been amended.

No.16/2007 – Amendment to the Exchange Control Rulings. Sections B.2(B0(ii)(a), B.2(B)(ii)(b) and I.1(D) have been amended.

No.17/2007 – Authorised Dealers in Foreign Exchange with limited authority (“ADLA”). This circular advises that the formalguidelines for regulating the appointment and conduct of ADLAs have been approved by the Minister of Finance. A new SectionA.4 has been incorporated into the Exchange Control Rulings (the Rulings) dealing with the submission of applications to conductthe business of an ADLA.

No.18/2007 – Authorised Dealers in Foreign Exchange. Sasfin Bank Limited was appointed as an ADLA. The Rulings havebeen updated accordingly.

No.19/2007 – Amendment to the Exchange Control Rulings. Sections A.3(B) and B.2(A) have been amended.

No.20/2007 – Inward listings by foreign issuers of debt instruments on the JSE Limited. Authorised Dealers are referred toSection H.(C) of the Rulings. The JSE Limited can now also facilitate the listing of debt instruments by foreign issuers. The Rulingshave been amended accordingly.

REGULATED INDUSTRIESCONTINUED

No.21/2007 – Securities Control – Authorised Bank. The name Rand Merchant Bank, a division of FirstRand Bank Limited,contained in the list of names under the heading of FirstRand Bank Limited in subsection G.(A)(iii)(j) of the Rulings has beendeleted. The Rulings have been updated accordingly.

No.22/2007 – Authorised Dealers in Foreign Exchange. ADLAs are advised that, as a result of the change of name of RenniesBank Limited to Bidvest Bank Limited and pending the formal exchange, ADLAs may, with immediate effect, conduct foreigncurrency business with Bidvest Bank Limited.

No.23/2007 – Authorised Dealers in Foreign Exchange. The appointment of HSBC Bank Plc – Johannesburg Branch has beendeleted. The Hongkong and Shanghai Banking Corporation Limited – Johannesburg Branch is appointed as an ADLA withimmediate effect. The Rulings have been updated accordingly

The circulars are available on the SARB website at www.reservebank.co.za

• That adequate measures are inoperation to ensure the continuedsafety of documents of title relatingto assets held in safe custody.

Auditors have not been able to issue areport in this format for some time andin particular they cannot certify aspectsof internal control. Another difficulty isthat in many instances the systems andcontrols are not yet in place because the

asset manager does not yet have alicence for this business.

Concerns have been raised that whereauditors have submitted reports givingsome comfort but not in the exact formatof Schedule O these reports have beenrejected by the Financial Services Board(FSB) with the result that required licenceshave not been granted.

The FSB has indicated that it is aware ofthe issue. Until such time as the reporthas been updated, the FSB will accepta report from the auditors in a formatthat they can sign off, provided that theadministrator attaches a business planto prove that it is viable. The report isavailable on the FSB website atwww.fsb.co.za

A common query received by both theIndependent Regulatory Board forAuditors (IRBA) and the South AfricanInstitute of Chartered Accountants(SAICA) is whether or not an auditorhas a lien over books and records inhis possession if his fees are outstanding.Due to some uncertainty in this area,the IRBA and SAICA obtained a legalopinion in this regard, and the pertinentpoints are highlighted below for theinformation of practitioners. Please notethat this legal opinion has beensummarised to include those points

relevant to an auditor’s right of retention.

Clause 15.26 of the PAAB Code ofProfessional Conduct states:“Unless he/she has a lien over anybooks and papers for the payment ofcharges outstanding, the existingaccountant should, promptly after thechange in appointment, transfer allbooks and papers that are the propertyof the client and which are in or maycome into his/her possession to theclient, or with the client’s permission, tothe newly appointed accountant.

Whether or not he/she has a lien is aquestion of law and of fact, andpractitioners should bear in mind thata refusal to hand over books andpapers over which they do not have avalid lien could render them liable forany costs by the client as a consequenceof that refusal.

There is little doubt that an auditor whois in possession of documents belongingto his client may have a lien over suchdocuments for the payment of fees.There is no case law for the specific

THE AUDITOR’S RIGHT OF RETENTION (LIEN)

ETHICS

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The Financial Advisory and IntermediaryServices (FAIS) Supervision department ofthe Financial Services Board (FSB) hasinitiated a process of active communicationwith authorised financial services providers(FSPs) through a regular newsletter.The theme of the latest FAIS newsletter iscompliance officers, compliance function,compliance reports and the relationshipsbetween compliance officers, FSPs as wellas the FSB. Articles are as follows:• Theme visits—compliance framework in

small FSPs

• Changes to the determination of Fit andProper requirements

• Requirements for appointment ofCompliance Officers

• Compliance officer approval process• Functions of compliance officers• Procedures for appointing or terminating

the services of compliance officers• Purpose of compliance reports and

methods of submission thereof

• Frequently asked questions relating tothe compliance report

The FSB welcomes suggestions on thenewsletter and for future topics. Forsuggestions, or to receive the FAISnewsletter, send an e-mail request tofaiscomment@fsb.co.za

FINANCIAL ADVISORY AND INTERMEDIARY SERVICES

If you refer to the Guides section of theSAICA Website, specifically the Contents– Volume 4, Trading Whilst FactuallyInsolvent, is listed as one of the Guidesissued in July 1999. We draw yourattention to the fact that an errata can befound on the front cover of the Guidestating:

“Since this Guide was issued in July 1999,the Public Accountants' and Auditors' Act

has been superseded by the AuditingProfession Act which contains significantchanges relating to irregularities and hasrendered certain sections of the Guideoutdated. Once the Companies Bill, 2007is finalised, which may also materially affectthe issues addressed in this Guide, thisGuide will be revised and consequentlythis version will be superseded. In themeantime, care should be taken in applyingthe Guide to ensure that there is compliance

with the provisions of the Auditing ProfessionAct and current auditing standards.

Paragraph .54 of the Guide – Asubordination agreement has never hadthe effect of restoring factual solvencyand/or converting debt to equity. Theclassification as financial liability/equityinstrument should be determined byreferring to IAS 32(AC 125) - FinancialInstruments: Disclosure and Presentation.”

ERRATA TO THE GUIDE: TRADING WHILSTFACTUALLY INSOLVENT

REGULATED INDUSTRIESCONTINUED

point that an auditor will have a lienover such documents, but otherprofessionals such as lawyers, architectsand even bookkeepers have beenallowed to rely on a lien.

The Appeal Court in Brooklyn HouseFurnishers (Pty) Ltd v Knoetze and Sons1970 (3) SA 264 (A) at 270Edetermined that South African lawrecognised three types of retention rights:

“(1) a retention right for the storageor safekeeping of property(“salvage liens”);(2) a retention right forimprovements (“improvementliens”); and(3) a retention right for debts excontractu (”debtor and creditorliens”).

Accordingly, an auditor’s lien can bedescribed as a “debtor’s and creditor’slien” to retain papers and documentswhich he has drawn up or upon whichhe has done work. The requirements forthe operation of the lien are that:

(a) a contract of work whetherexpressed or implied must beconcluded;

(b) a term of the contract must be thedoing of work on the property ofthe client for reward;

(c) the work must be done; and(d) the lien holder must possess the

property on which the work wasperformed (see Botha NO v E MMchunu & Co 1992 (4) SA 740(N)).

An auditor who has been appointed bya company clearly has complied withall these requirements and there isnothing in the Companies Act No. 61of 1973 (“the Act”) or in legislationregarding auditors which militatesagainst this conclusion. Section 273 ofthe Act merely determines that theauditor may be remunerated and thebasis for remuneration normally wouldbe set out in the engagement letterbetween the auditor and the company.

A further contention is that an auditorwill not have a lien to withholddocuments that have to be supplied interms of statutory duties. However, it issuggested this argument would bewrong. The exact scope of this type oflien is not yet settled in our law(Goodricke & Son v Auto Protection

Insurance Co Ltd (in Liquidation) 1968(1) SA 717 (A)). However, it is quiteclear that the lien extends to documentscompiled or improved for a client. Thesedocuments may be retained until thefee due for such work is paid in full.

Moreover, although it has not yet beensettled by the Supreme Court of Appeal,there is also good authority for the viewthat every document that is used in theprocess of performing activities for whichfees are charged is subject to the lien(Botha NO v E M Mchunu & Co 1992(4) SA 740 (N)). In this case CombrinckJ stated:

“The test as I see it should simplybe that if the attorney is entitled tocharge his client a fee in respectof a document in his possession,then he should be entitled toexercise a lien over it because thenit is recognised that he expendedwork and labour on it.”

This test was also supported in FreeState Agriculture & Eco TourismDevelopment v Mthembu andMohamed 2002 (5) SA 343 (O), whichalso held that the lien could be exercisedonly for the payment of fees for workdone. The lien does not apply toretainers.

The auditors therefore will have a lienover all documents in their possessionon which they perform work for a fee.All documents which they hold in orderto prepare the statutory audit such asthe books of the company will clearlybe included here, but also otherdocuments will be included as long asa fee is charged for performing serviceswith regard to them. Accordingly,statutory documents of a company thatare held by the auditors can form thebasis of a lien as long as a fee ischarged for keeping and dealing withthem.

The next question is whether companysecretarial documents will have to bereleased. If no fee is charged for therendering of secretarial services thenno lien will be created. If a fee ischarged, the answer to the question willdepend on whether the fee is divisible.Where the fee charged is indivisible alldocuments can be retained until theentire fee is paid. There is no need fora relationship of proportionality betweenthe documents and the fee.

The question of what documents canbe retained for what fee thereforedepends on whether the fee is divisibleor not. If the fee is divisible thendocuments will have to be releasedonce the fee for services rendered onsuch documents is paid.

Finally, an auditor is obliged to releasethe documents on payment of his fees.The company is the owner of thedocuments and is entitled to have themreleased. Should the auditor not releasethe documents once the outstanding feehas been paid, a legal action (reivindicatio) can be brought against theauditor. Prior to payment of theoutstanding fees, the auditor can refuseto do so as he has a lien over thedocuments but once fees are paid thelien is lost.

In the final instance, it should beobserved that some of the problemswith regard to the lien may be side-stepped by requiring the provision ofsecurity for the payment of fees from aclient.

In conclusion, auditors are advised ofthe following:

1. Whether a lien exists or not remainsa question of law and of fact andwill depend on the specificcircumstances presented.

2. If an auditor exercises a non-existentlien over his/her client’s documents,they are doing so at their own risk.

3. Unless a registered auditor has alien over a client’s books andpapers, he or she is advised to handover the client’s books and papers.

4. Auditors may want to considerrevising their engagement letters sothat there is a specific provision thatwill deal with the issue of retentionof files if fees are not paid.

11

ETHICSCONTINUED

12

Subject Matter

• The practice review process• Quality control policies and

procedures• Auditing standards requirements

Participants

Minimum of 12 persons.Individual firms / groups of firms / smallpractitioner forums.

Target Audience

Partners and audit staff.

Cost

R 460 plus VAT per participant.

Contact

Elaine Beljon

Tel: (011) 622-8533Fax : (011) 622-7334

PRACTICE REVIEW

3 HOUR INTERACTIVE DISCUSSION GROUP

IESBA EXPOSURE DRAFT RELEASED FOR COMMENT

• The International Ethics StandardsBoard for Accountants (IESBA), anindependent standard-setting boardwithin the International Federationof Accountants (IFAC), has issuedan exposure draft proposing tostrengthen three components of theindependence requirementscontained in its Code.

• In December 2006, the IESBAissued an exposure draft proposingrevisions to the existingindependence requirementscontained in the Code. In thatexposure draft (which is now calledIndependence I), the IESBAindicated that there were three areasthat the IESBA would revise in a

future exposure draft, namely:

• Provision of internal auditservices to an audit client;

• Independence implicationsrelated to the relative size offees received from oneassurance client; and

• Contingent fees for servicesprovided to assurance clients.

This exposure draft which is calledProposed Revised Section 290 - of theCode of Ethics for ProfessionalAccountants, Independence - Audit andReview Engagements and ProposedSection 291, Independence - OtherAssurance Engagements,

was released in SA in July 2007 witha comment date of 15 October 2007.The CFAE submitted a comment letterto the IESBA, which is available on theIRBA website at www.irba.co.za.

Queries: Bernard Peter AgulhasDirector: StandardsTelephone: (011) 622-8533Facsimile: (011) 622-4029E-mail: bagulhas@irba.co.za

ETHICSCONTINUED

13

LEGAL

As mentioned previously, thedisciplinary procedures of the Boardin terms of the Auditing Profession Actare somewhat different to those underthe Public Accountants’ and Auditors’Act. However, in terms of thetransitional procedures, matters whichwere already before the Investigationand Disciplinary Committees underthe old dispensation continue to befinalised in terms of those processes. The majority of matters from now onfall to be finalised in terms of the newprocedures, and there will thus be lessand less reported from this committee,and more from the DisciplinaryAdvisory Committee.

The Investigating Committee met twiceduring this period and disposed of 11

cases, in terms of the old dispensation,as follows:

Matters not proceeded with

6 matters were not proceeded with:• 5 were withdrawn by the

complainant;• 1 was suspended until the outcome

of current litigation

Matters discharged

1 case in terms of Disciplinary Rule3.9.2 (the conduct in question – evenif proved – not constitutingunprofessional conduct).

Matters with guilty findings

4 practitioners were found guilty andpunished, by consent, as follows:

4 practitioners were fined. The matterswere as follows:• 1 related to negligence (audit)

(R75,000 of which R37,500 wassuspended on conditions)

• 2 related to negligence (tax)(R20,000 of which R10,000 wassuspended on conditions; andR5,000, respectively)

• 1 arose out of practice review: 2ndcycle, 2nd review (R20,000 ofwhich R10,000 was suspended onconditions, R300 contribution towasted costs.)

QUARTERLY REPORT FROM THE DIRECTOR: LEGALFOR THE PERIOD 1 JANUARY 2007 TO 31 MARCH 2007

INVESTIGATING COMMITTEE

DISCIPLINARY ADVISORY COMMITTEE

The Disciplinary Advisory Committeemet once during this period anddisposed of 12 matters as follows.Unless otherwise indicated, the findingreached accorded with thatrecommended by the InvestigatingCommittee.

Decision not to charge

3 matters not prosecuted in terms ofRule 3.9.3 (there being no reasonableprospect of proving the respondentguilty of the conduct in question):

Decision to charge and matter finalisedby consent:

CautionedThree practitioners were cautioned.The matters were as follows:

1 related to general negligence1 related to overcharging1 arose out of a GMP referral

FinedSix practitioners were fined. The mattersarose out of practice review.All were 2nd cycle reviews.

2nd reviews:One practitioner was finedR20,000 – R10,000 of which was

suspended on conditions;

Two practitioners were finedR30,000 – R15,000 of which wassuspended on conditions;Two practitioners were finedR30,000 – R20,000 of which wassuspended on conditions

3rd review:One practitioner was finedR30,000 of which R15,000 wassuspended on conditions, as wellas the imposition of a previouslysuspended fine of R15,000

14

LEGALCONTINUED

Die nuut gekose Dissiplinêre Kommitteehet vir die eerste keer op die 22steJanuarie 2007 ontmoet om die saakteen mnr L te verhoor. Hy was skuldigbevind op al drie aanklagte soosaangevoer teen hom. Hy wasteenwoordig maar nie verteenwoordignie.

Die eerste klag

Die Praktisyn was skuldig bevind aanonbehoorlike gedrag soos bedoel inDissiplinêre Reël 2.1.5 deurdat hysonder redelike oorsaak of verskoning,en in die vlogende opsigte uiteengesit,versuim het om sy werk of pligte asouditeur van [AB], wat werk of pligtewas wat gewoonlik deur 'ngeregistreerde rekenmeester en ouditeuruitgevoer word, met sodanige mate vanomsigtigheid en bedrewenheid uit tevoer as wat volgens die Raad seoordeel rederlikerwys verwag kan word;

Feite waarop die eerste klag gebaseerword

Die Praktisyn het in die volgende opsigteversuim om ouditwerkspapiere ofouditbewyse (alternatiewelik voldoendeof onvolledige ouditwerkspapiere ofouditbewyse) op te stel of te bekom ofte behou in verband met sy oudit vandie [AB] finansiële state; hy hetderhalwe versuim om te voldoen aanalgemeen aanvaarde ouditstandaarde,en wel in die volgende opsigte:

Beplanningsaangeleenthede

o daar was geen of onvoldoendewerkspapiere of ouditbewyse omaan te dui dat die Praktisynoorweging gegee het aan die wetteen regulasies wat op die besigheidvan [AB] van toepassing was. DiePraktisyn het derhalwe versuim omte voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 250;

o daar was geen of onvoldoendewerkspapiere of ouditbewyse omaan te dui dat die Praktisynoorweging gegee het aan die vraagvan die risiko van wesenlikewanvoorstellings in die [AB]

finansiële state wat uit bedrog enfoute mag ontstaan het. DiePraktisyn het derhalwe versuim omte voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 240;

o daar was geen of onvoldoendewerkspapiere of ouditbewyserakende 'n beoordeling vanouditrisiko op die verklaringsvlak.Die Praktisyn het derhalwe versuimom te voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 400;

Verifikasie

Daar was geen of onvoldoendewerkspapiere of ouditbewyse rakendedie volgende:o voorraad ter waarde van ongeveer

R419 000;o debiteure ter waarde van ongeveer

R1 051 000;o inkomste van ongeveer R5 741 000;o koste van verkope van ongeveer

R4 700 000;o bedryfsuitgawes van ongeveer

R639 000;o betaalstaat van ongeveer

R434 000;o langtermyn versekerde lenings van

ongeveer R601 000;o bankrekening van ongeveer

R244 000;o aandelekapitaal van ongeveer

R1 000;o lenings betaalbaar van ongeveer

R297 000;o aandeelhouerslening van ongeveer

R111 000;o debietlenings van ongeveer

R97 000 ingesluit by leningsbetaalbaar;

o moontlike voorsiening vanuitgestelde belastingbate;

o volledigheid van krediteure;o die verskil tussen ouderdomsanalise

en krediteure voorsieningslys vanongeveer R779 000.

Die Praktisyn het derhalwe versuim omte voldoen aan algemeen aanvaardeouditstandaarde en meer in besonderSAOS 230 en/of SAOS 500;

Afhandelingsaangeleenthede

Daar was geen of onvoldoendewerkspapiere of ouditbewyse dat dieouditeur procedures uitgevoer het omgebeure na die balansstaatdatum teidentifiseer. Die Praktisyn het derhalweversuim om te voldoen aan algemeenaanvaarde ouditstandaarde en meerin besonder SAOS 230 en/ofSAOS 560;

Bestuursverklaring

Die bestuursverklaringsbrief wat deurdie Praktisyn bekom is is ongeveer eenen 'n half maande voor dieouditverslagdatum gedateer. DiePraktisyn het derhalwe versuim om tevoldoen aan algemeen aanvaardeouditstandaarde en meer in besonderSAOS 580.

Die tweede klag

Die Praktisyn was skuldig bevind aanonbehoorlike gedrag soos bedoel inDissiplinêre Reël 2.1.5 deurdat hy,sonder redelike oorsaak of verskoning,en in die volgenda opsigte uiteengesit,versuim het om sy werk of pligte asouditeur van [NS], wat werk of pligtewas wat gewoonlik deur 'ngeregistreerde rekenmeester en ouditeuruitgevoer word, met sodanige mate vanomsigtigheid en bedrewenheid uit tevoer as wat volgens die Raad seoordeel rederlikerwys verwag kan word;

Feite waarop die tweede klag gebaseerword

Die Praktisyn het in die volgende opsigteversuim om ouditwerkspapiere ofouditbewyse (alternatiewelik voldoendeof volledige ouditwerkspapiere ofouditbewyse) op te stel of te bekom ofte behou in verband met sy oudit vandie [NS] finansiële state. Die Praktisynhet derhalwe versuim om te voldoenaan algemeen aanvaardeouditstandaarde en wel in die volgendeopsigte:

DISCIPLINARY COMMITTEE

LEGALCONTINUED

Beplanningsaangeleenthede

o daar was geen of onvoldoendewerkspapiere of ouditbewyse omaan te dui dat die Praktisynoorweging gegee het aan die wetteen regulasies wat op die besigheidvan [NS] van toepassing was. DiePraktisyn het derhalwe versuim omte voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 250;

o daar was geen of onvoldoendewerkspapiere of ouditbewyse omaan te dui dat die Praktisynoorweging gegee het aan dievraag van die risiko van wesenlikewanvoorstellings in die [NS]finansiële state wat uit bedrog enfoute mag ontstaan het. DiePraktisyn het derhalwe versuim omte voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 240;

o daar was geen of onvoldoendewerkspapiere of ouditbewyserakende 'n beoordeling vanouditrisiko op die verklaringsvlak. Die Praktisyn het derhalwe versuimom te voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 400;

Verifikasie

Daar was geen of onvoldoendewerkspapiere of ouditbewyserakende die volgende:

o voorraad ter waarde van ongeveerR351 000;

o die verskil tussen werkspapiere vandebiteure van ongeveer R96 000;

o inkomste van ongeveerR2 703 000;

o koste van verkope van ongeveerR2 281 000;o bedryfsuitgawes van ongeveerR213 000;

o betaalstaat van ongeveerR325 000;

o salarisvoorsienings van ongeveerR104 000;

o moontlike voorsiening vanuitgestelde belastingbate;

o lenings vanaf groepmaatskappyevan ongeveer R186 000;

o debietlening van ongeveerR54 000 ingesluit by debiteure;

o BTW ontvangbaar van ongeveerR54 000;

o geldigheid van verskil op BTWrekonsiliasie van ongeveerR124 000;

o krediteure van ongeveerR1 392 000 en in besonder dievolledigheid daarvan.

Die Praktisyn het derhalwe versuim omte voldoen aan algemeen aanvaardeouditstandaarde en meer in besonderSAOS 230 en/of SAOS 500;

Afhandelingsaangeleenthede

daar was geen of onvoldoendewerkspapiere of ouditbewyse datdie ouditeur procedures uitgevoerhet om gebeure na diebalansstaatdatum te identifiseer.Die Praktisyn het derhalwe versuimom te voldoen aan algemeenaanvaarde ouditstandaarde enmeer in besonder SAOS 230 en/ofSAOS 560;

Bestuursverklaring

die bestuursverklaringsbrief watdeur die Praktisyn bekom is isongeveer een en 'n half maandevoor die ouditverslagdatumgedateer. Die Praktisyn hetderhalwe versuim om te voldoenaan algemeen aanvaardeouditstandaarde en meer inbesonder SAOS 580.

Die derde klag

Die Praktisyn was skuldig bevind aanonbehoorlike gedrag soos bedoel inDissiplinêre Reël 2.1.14 deurdat hy,sonder redelike oorsaak of verskoning,en in die volgende opsigte, versuim hetom te antwoord of op toepaslike wysebinne 'n redelike tydperk te handel metkorrespondensie of ander vorms vanKommunikasie vanaf die Raad wat 'nantwoord benodig het;

Feite waarop die derde klag gebaseerword

Die Praktisyn het versuim om teantwoord of op toepaslike wyse binne'n redelike tydperk te handel met[verskeie] korrespondensie of andervorms van Kommunikasie vanaf die

Raad wat 'n antwoord benodig het:• brief vanaf die Raad gedateer

12 September 2005;• e-pos vanaf die Raad gedateer

9 November 2005;• brief vanaf die Raad gedateer

30 November 2005;• brief vanaf die Raad gedateer

23 Februarie 2006.

Uitspraak en vonnis

Die voorsitter van die komitee, Adv vander Linde het die uitspraak gelewer.Ter wille van goeie order is dit hierondervolledig uiteengesit.

“Die dissiplinêre komitee kom nou bywat gebruiklik die moeilikste deel vansy verrigtinge is, en dit is om ‘n gepastestraftoemeting op te lê vir Mnr [L].

Gebruiklik word die belange van diegemeenskap, in hierdie geval dieouditeursberoep en die sake wêreld inag geneem in die eerste plek.Tweedens, die aard van die misdryfwaaraan die Respondent skuldigbevind is, en in die derde plek, diebelange van die Respondent self.

Behoorlike straftoemeting behels ‘nopweging van daardie drie onderskeiebelange, en dan die oplegging van ‘ngepaste straf. Primêr egter bystrafoplegging is gebruiklik pogingsom die oortreder te rehabiliteer, wantuiteindelik is dit meer in die gemeenskapse belang dat ‘n oortredergerehabiliteer word as wat dit is omdie oortreder uit die gemeenskap uitte verwyder.

15

16

Met daardie faktore in ag geneem,het ons die aard van die oortreding asernstig tipeer, soos die pro forma klaerbetoog het. Dit kom vir ons voor datdie oortreding te doen het met tweeoudits waarvan daar bitter mingetuienis ten opsigte van wesenlikebelangrike balansstate en inkomstestaat items bestaan. Daar was voorons nie getuienis oor of die ouditsinderdaad uitgevoer is nie, en ekaanvaar dat dit moeilik is om sulkegetuienis voor ons te plaas, veral indie afwesigheid van die dokumentêrebewys waarna die klagstaat verwys.Dit is juis omdat dit moeilik is om vaste stel of so ‘n oudit behoorlik uitgevoeris dat die vereiste bestaan dat daardokumentêre bewys moet bestaan vandie uitvoer van so ‘n oudit. In dienormale gang, alles andersgelyksynde, sou die afwesigheid vanouditgetuienis ons waarskynlik genoophet daartoe om die ernstigstegenoophet daartoe om die ernstigste strafwaarvoor die Wet voorsiening maakop te lê.

Ingevolge Artikel 51(3)(a)(iv) behelsdit die kansellasie van die registrasievan die Respondent. Ons het egterook die persoonlike omstandighedevan Mnr [L] in ag geneem, maar ookdit was nie ‘n maklike taak nie. Teenhom, na ons mening, tel die feit dat hy

nie ‘n klinkklare plan vir die toekomshet nie, en onseker was toe ons homgevra het of hy sy toekoms in dieouditeursberoep sien. Daarinteen magdit wees dat sy onsekerheid daaruitspruit dat hy nie weet wat vandag hiermet hom kan gebeur nie, en hybeswaarlik planne kan maak op diebasis dat hy in die beroep gaan blyindien wat vandag hier gebeur betekendat hy nie in die beroep kan by nie.Dit mag ook wees dat die opmerkingsvan Mnr [S] hom tot pessimisme gestemhet. Wat egter ook teen hom tel is diefeit dat dit nie die eerste keer is dathy gemeet word en te lig bevind wordten opsigte van die nakoming van sypraktykstandaarde nie.

Sy vorige veroordeling is in hierdieverband ‘n baie belangrike feit watteen hom tel. Na alles egter het Mnr[L] stappe gedoen wat daarop dui dathy graag sy praktykstandaard wilverbeter, en ek verwys in hierdieverband na die rekenaarprogram wathy aangekoop het, ek verwys na diestappe wat hy gedoen het om sypraktykstandaard te verhoog ten eindete voldoen aan praktykoorsigte, en ekverwys na die vergaderings wat hybygewoon het by Me [B] sewerkswinkels.

Dit alles in aggenome is die straf watons oplê die volgende.

Eerstens, die Respondent se registrasieword ingevolge Artikel 51(3)(iv) vanWet 26 van 2005 gekanselleer, maardie kansellasie word opgeskort opvoorwaarde dat die Respondent beidesy praktykoorsig van die tweede siklusen sy praktykoorsig van sy derde sikluswat moet plaasvind binne twee jaarna die aanvang van die derde siklus,moet slaag.

Tweedens, die Respondent word metR25,000.00 beboet.

Derdens, die Respondent word gelasom ‘n bydrae tot die koste van hierdieverrigtinge ten bedrae vanR25,000.00 te maak.

Vierdens, die Respondent se vorigeopgeskorte boete ten bedrae vanR15,000.00 word in werking gestel,en

Vyfdens, die feite van hierdie verhoor,met inagneming van die bevinding envan die vonnis, maar met uitlating vandie Respondent se naam, moet in IRBANEWS gepubliseer word; myverwysing na die Respondent se naam,sluit in die verwysing na sy firma senaam.”

LEGALCONTINUED

17

QUARTERLY REPORT FROM THE DIRECTOR: LEGALFOR THE PERIOD 1 APRIL 2007 TO 30 JUNE 2007

This quarter has seen many changesin the Legal Department, mostparticularly the approval of the newDisciplinary Rules on 7 June 2007.

In terms of the transitional provisionsof the Act (section 59(8)(b)), theexisting Disciplinary Rules continue tohave effect under the new dispensation. The section had an interesting slant:it grouped Disciplinary Rule 2.1 –2.1.21 (which lists what constitutesimproper conduct) in with the Code of

Conduct, and keep the rest of the Rules(which were mostly procedural)separate.The new rules (which will be referredto simply as the ‘Disciplinary Rules’)are in effect and govern the manner inwhich improper conduct is investigatedand punished.

Rule 2.1 – 2.1.21 of the previous rulesremain in force until a new Code ofConduct is promulgated. In the interim,these sub-rules will be referred to as

the ‘Old Disciplinary Rules’ as referenceis still frequently made to them.

The Disciplinary Rules have beenplaced on the website, and a bulk mailin this regard was despatched to allRAs on 16 July 2007. The Rules arealso to be found in GovernmentGazette number 30004 of 29 June2007.

INVESTIGATING COMMITTEE

LEGALCONTINUED

In terms of the transitional procedures,matters which were already beforethe Investigation and DisciplinaryCommittees under the olddispensation, continue to be finalisedin terms of those processes. Themajority of matters now fall to befinalised in terms of the newprocedures, and there will thus be lessand less reported from this committee,and more from the DisciplinaryAdvisory Committee.

The Investigating Committee met twiceduring this period and disposed of 8cases, in terms of the old dispensation,as follows:

Matters not proceeded with

7 matters were not proceeded with:• 6 were withdrawn by the

complainant;• 1 was closed as the respondent has

emigrated and the complainantdoes not communicate with us

Matters discharged

1 case in terms of Disciplinary Rule3.9.3 (there being no reasonableprospect of proving the respondentguilty of the conduct alleged).

Farewell to Horton Griffiths

18

LEGALCONTINUED

The committee took leave of long-timeand dedicated chairman HortonGriffiths at its meeting on 10 May2007. He now serves on theDisciplinary Committee. Kishore

Kooverjee took over the chairmanshipand we wish him well in this position. In addition, Mr Hoosen Wadiwalajoined the committee on 10 May 2007,as a member independent of the

profession. He is an attorney practisingfor his own account, who spent anumber of years with Deloitte, so he isperfectly positioned to add value tothe committee. We welcome him.

DISCIPLINARY ADVISORY COMMITTEE

This committee comprises three peoplewho are all members of the Board.From 29 May 2007 we are honouredto have the chairman of the Board,Dines Gihwala, as a member of thecommittee. As a past chairman of theDisciplinary Committee he addstremendous value to the committee.The other two members are Wynanddu Plessis (chairman) and CathrynEmslie, both RAs.

The Disciplinary Advisory Committeemet twice during this period anddisposed of 20 matters as follows.

Decision not to charge

4 cases in terms of Disciplinary Rule3.9.1 (the respondent having given areasonable explanation for theconduct).4 cases in terms of Disciplinary Rule3.9.2 (the conduct in question – evenif proved – not constitutingunprofessional conduct).4 cases in terms of Rule 3.9.3 (therebeing no reasonable prospect ofproving the respondent guilty of theconduct in question):

Decision to charge and matter finalisedby consent:

CautionedOne practitioner was cautioned. Thematter related to overcharging.

FinedSeven practitioners were fined. Thematters were as follows:• One related to the appearance of

a lack of independence (R10,000)• Six arose out of practice review.

All were 2nd cycle reviews.

19

2nd reviews:Three practitioners were each finedR30,000 of which R15,000 wassuspended on conditions;

3rd reviews:One practitioner was fined R30,000

of which R15,000 was suspendedon conditions,One practitioner was fined R30,000of which R5,000 was suspended onconditions,One practitioner was fined R20,000

of which R10,000 was suspendedon conditions.

In certain matters the imposition ofsentence was postponed indefinitely oncondition that the practitioners stoppedperforming the attest function.

LEGALCONTINUED

With effect from 1 April 2007, thecommittee is made up as follows:

Chairman:

Adv Willem van der Linde SC

Deputy chairmen:

Adv A DodsonAdv Tim Bruinders SC

RA members:

Mr Antonie JaggaMr Charles ReidMr John RhynesMr Horton GriffithsMr Danny Naidoo

Non-RA members:

CA (SA): Mr Andre de WetAttorneys: Mr Hussan Goga

Mr Lepono Lekale

Usually 6 members (comprising aquorum of the committee) sit to hear amatter.

The newly constituted DisciplinaryCommittee met twice during this period.

FIRST MATTER

On 2 April 2007 the committee heardthe case against Mr P H Ferreira. Hedid not appear and was no longer onthe register at the time of the hearing.

The facts appear from the sentencewhich was handed down by thechairman of the committee Adv van derLinde SC, as follows:

Finding:

In this matter the respondent, Mr P HFerreira was charged with four charges.

The charge sheet described the factsthat are relied upon to found these fourcharges and it is not necessary to repeatthem. In support of the charges the proforma complainant, the IRBA, calledtwo witnesses, Mr [C] and Ms [O]respectively.

Ms [O], who testified second, is thedirector of legal services of the Boardand the nature of her evidence wasformal. She proved that the respondentwas registered on the 1st July 1992 asan auditor and accountant with the thenBoard until the 1st March 2006 whenhe wrote a letter of that date, receivedlater during that month by the Board,in which he notified his intention tocancel his registration. He asked thathis cancellation of registration be dealtwith accordingly and since he did notpay his fees for the year following31 December 2005 the Boardaccepted that that conveyed an intentionthat his registration be cancelled witheffect from the 1st January 2006. Ms[O] also proved despatch of the lettersdated the 20th October 2005, the 28thNovember 2005, the 6th February2006 and the 10th February 2006.No response was received to thoseletters.

The evidence of Mr [C], which I willsummarise in the main, was to thefollowing effect. He said that he hadbeen a construction contractor for some25 years and had had a professionalrelationship with a [D] since about 1994. I will refer to [D] and the respondent,[H], respectively by their first names,meaning no disrespect but simply toavoid confusion.

In the beginning of 2002, [D] told himabout an investment that was linked to[WPM] staff. How it worked was thata company by the name of ABCFinancial Services (Pty) Limited ‘[ABC]’,would lend money to the staff of the

mine and since the management of themine would deduct the repayments fromthe wages or salaries of the staff torepay it to ABC the loans to the staff ofthe mine were secure. Therefore ABCwas able to offer to investors asubstantial return on their outlay,particularly an interest of 6% per monthand this attracted Mr [C]. Initially hewas not interested but some 6 monthslater [D] persuaded him to invest themoney. [D] also told him that [H] wasthe auditor of that company. There wasno prospectus and everything wasverbal. [D] explained to him that themoney was to be transferred to [H]’strust account, which Mr [C] thenarranged to be done. He also signeda written loan agreement, which [D]produced pre-signed by [H] and he,Mr [C], signed it on the 15th January2002. In terms of that agreement hewould advance R200,000.00. Thiswould carry interest at 6% per monthand the loan would be for not less than12 months.

He did not for a fact know that the othersignature was that of [H], but assumedthat it was, on the basis of what [D] hadsaid to him. He proved [H]’s signatureby reference to the affidavit which [H]made on the 28th October 2004.

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Mr [C] said that it was his accountantthat drew the cheque and [D] arrangedfor a messenger to collect the moneyand to pay the money to what Mr [C]described as [H]’s ‘trust account’. Theamount that he paid was R283,020.00and not only R200,000.00. Thereason for this was that Mr [C] hadhad more monies available to his creditwith his accountants and he wanted toclear that account, intending later togive [D] further instructions as to whatto do with the R83,020.00.

Later on Mr [C] established that in factABC did not exist. This was when hehad phoned [D] to enquire about asecond investment that he, Mr [C], hadmade with [D] to the tune of about R1million that had also gone sour. Heenquired then about the investment withABC and was told by [D] that ABC hadbeen liquidated but that he, Mr [C],did not have to worry since he wouldrecover his money from the liquidators.

Mr [C] tried to claim back the moneybut was from time to time led up thegarden path by [D] who eventuallygave him the wrong liquidator’saddress. Through his attorneys heestablished that [VT] were theliquidators but they conveyed that ABCnever existed. In fact the pro formacomplainant proved by handing in acertificate stamped by the Registrar ofCompanies on the 12th March 2007,which says that:

“According to our computer recordsno company by the name of ABCor ABC Financial Services wasregistered as at 15 January 2002.”

Mr [C] said that his attorney establishedthrough the attorney of [H],, a Mr [M],that the investment was not with ABCbut with a private individual by thename of Ms [MA]. Mr [C] said thathe was not a client of [H], and after hehad heard from [D] that ABC had beenliquidated and after he had found outon the 3rd March 2003 that the otherinvestment with [D] had also gone sourhe handed over both matters to hisattorney.

He says in 2004 he went past [H]’soffice and it was then only that he hadmet [H]. He said he asked [H] for proofthat [H] actually transferred the moniespaid over to [H] away from [H] andinto an investment recipient. [H] didnot give him an answer and insteadreferred him to his, that is [H]’s attorney.

He, Mr [C] persevered trying to receivean accounting, but this was neverprovided.

He said that he accepts that theR283,020.00 was in fact paid by [D]to [H], but he disputed that an amountof R83,020.00 was repaid by [H] tohim on the 29th January 2002. Hesaid with reference to extracts from abank account appearing as the bankaccount of Mr Henk Ferreira, that theR83,020.00 referred to there as a debitagainst that account on the 29thJanuary 2002 was probably theamount that he had invested. However,the account number to which thatamount was transferred was not onethat he was familiar with, although lateron in questioning by the tribunal hesaid that that could have been theaccount of [D].

He was asked whether [H] was correctwhen he said that at no stage did Mr[C] invest money with him, that that wasindeed correct, that he was investingwith a scheme and that he was toldthat [H] was indeed the auditor of thescheme. He regarded the investmentwith ABC though [H]. The fact that [H]signed the agreement on behalf of ABCled him to be assured that [H] wasindeed the auditor of the scheme as[D] had told him. The statement whichis an attachment to affidavit by [H]confirming what had happened to themonies which [H] had paid over to Ms[M] was unfamiliar to Mr [C] and hecould not assist in explaining itscomposition.

He said, did Mr [C], that he wouldnever have invested money with aprivate person and that he thoughtthroughout that he was dealing with acompany, and the reason why this wasimportant to him was that he thoughtthat there would be regulationapplicable to companies, by means ofaccounts and statements and auditorswhich did not apply to individuals. Hesaid that he did not remember receivingthe R20,000.00 to which [H]’s attorneyreferred, but did say that his own bankaccount reflected R20,000.00 comingin, then again going out, but then laterin questioning from the tribunal saidthat it then came in again, so thatultimately he was credited with the netamount of R20,000.00.As regards the R99,020.00, which Mr[M]’s letter says was paid to Mr [C] onthe 25th July 2002, Mr [C] concededthat he did receive this. The

circumstances under which he receivedit were that he had phoned [D] sayingthat he needed the balance of his fundsof about R83,000.00 and the next dayor shortly thereafter he receivedpayment of R99,020.00 but with nodetail as to how this amount was madeup. In questioning from the tribunal hedid concede however that at leastincluded within that amount had to bethe R83,020.00 which he had paidover through his accountants to Mr [H].

In his evidence in chief however hesaid that he never received repaymentof the R83,020.00. In questioningfrom members of the tribunal he saidthat he did not think that the investmentwas illegal and in fact thought it waslegal, although he took no legal adviceand has no legal background. Hecorrected the date which appears inhis affidavit at page 35, paragraph8.2 as July 2003 to July 2002, whichcorrection would bring his evidence inthe affidavit in line with his evidencebefore this tribunal. In response to aquestion he said that he did not questionthe composition of the R99,020.00that was paid to him. In response toother questions he said that he was toldthat he would get interest at 6% permonth and that this would be paid after12 months. He understood, he said,that [H] was acting as an auditor ofthe ABC.

In response to further questions he saidthat he was not told that there was anyrisk in the investment and that, strangeas it may seem at face value, [D]convinced him that the risk was minimal.

That being the evidence for thecomplainant, he argued for thefollowing findings of guilty.….

As regards the first charge …, hefairly conceded that such evidenceas there was, which was of coursemade more difficult by the fact thatMr Ferreira was not here to testify,did not prove dishonesty. He didhowever submit that the respondentwas guilty of the second alternativeof the first charge, … in that he actedby failing to account to Mr [C] in amanner which is improper ordiscreditable or unprofessional ordishonourable or unworthy on thepart of a practitioner, or in a mannerwhich tends to bring the professionof accounting into disrepute, or asenvisaged in disciplinary rule2.1.21.

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He submitted that although he couldnot argue that the receipt by MrFerreira of the investment was notby Mr Ferreira in his capacity aseither an auditor or accountant, andI may add a submission with whichthis tribunal respectfully agrees,nonetheless the very fact that as aprofessional person Mr Ferreirareceived this investment behovedhim to account about that investmentto the person who paid over themoney to him. With that submissionwe agree, although it is true thatMr Henk Ferreira probably did notreceive the money as an auditor oraccountant, the high professionalstandards of the profession exactsof Mr Ferreira in the circumstancesto account to Mr [C] about whathad happened to that money.

In our view his failure to do so makeshim guilty of improper conduct in termsof Rule 2.1.21, which I have referredto above, and he is so found guilty.

As regards the second charge, thepro forma complainant argued thatMr Ferreira had a duty to ensurethat ABC in fact was registered.He said that that duty existed as amatter of law and that Mr Ferreiramust have realised that Mr [C]would rely on Mr Ferreira’s integrityas a professional person to ensurethe registration of that company.Again we agree, after all what MrFerreira did was to send into theworld a document which purportedto be a loan agreement between aprospective investor of a substantialamount, being R200,000.00,signed by Mr Ferreira on behalf ofthe company. Indeed it is tellingthat the domicilium citandi etexecutandi of the borrower is givenas …, the address of Mr Ferreira.It is true that the representationssurrounding the signature by Mr [C]of that loan agreement to the effectthat Mr Ferreira was an auditor wasnot made by Mr Ferreira in termsof the agreement itself but by Mr[D], but nonetheless thatrepresentation was not false andwas indeed true. It follows thatwhen Mr [C] received this documenthe knew, because this was the truth,that the person who signed onbehalf of ABC was an auditorregistered with the Board and thereliance to which Mr [C] testifiedflowing from that fact was

accordingly justified.

We therefore find that in this regardtoo Mr Henk Ferreira was guilty ofimproper conduct as envisaged in Rule2.1.21.

[The chairman discussed the argumentspresented and then continued]

The fourth charge and third onepreferred, is that relating to the failureto answer or to deal appropriatelywithin a reasonable time withcorrespondence emanating from theBoard. This failure is in itself regardedas improper conduct in terms of Rule2.1.14. … The despatch of the lettersconcerned and the failure to respondto them and it follows that the four letterslisted in support of the 4th charge havebeen duly proved and the charge dulyproved.

We accordingly find Mr Ferreira guiltyof that charge as well.

In summary, Mr Ferreira is found guiltyof two charges of improper conduct,both under Rule 2.1.21 as well as athird charge of improper conduct underRule 2.1.14

Sanction

In this matter the question of sentencingnow arises. Traditionally in imposinga sentence one takes into account theoffence, the individual and the interestsof society.

As regards the offence the threecharges of which we have found MrFerreira to have been guilty, althoughall of them fitting into charges ofimproper conduct, are charges whichhe could have avoided by simple cheapand easy conduct. It would have beenvery easy for Mr Ferreira to account toMr [C]. It would have been very easyfor Mr Ferreira to establish whetherABC has not been registered or hasbeen registered and it would have beenvery easy for him to have respondedto the mail from the Board. That factcounts against Mr Ferreira in weighingan appropriate sentence.

What also counts against Mr Ferreiraon this score in weighing an appropriatesentence, is that his failure in at leastthe first two instances, but particularlythe second instance, that is the failureto establish whether ABC was registered

or not, could have, and in this casemight very well have had, heavyfinancial consequences for members ofthe public at large.

The third factor which we take intoaccount weighs in favour of Mr Ferreiraand that is that we have not found anydishonesty on his part.

As regards the individual we assumethat he is a first offender and that countsin his favour.

What counts against him is that he didnot appear here today to assist us incoming to a just conclusion. That countsin our view quite heavily against him.As regards the interests of society weregard the crime as a serious one. Byputting his signature on a documentpurporting to represent a non-existingcompany and sending it into the worldat large is in our view serious since it isso easy for members of the public, ashappened here, to take strength fromthe fact that the person representingthe investment recipient was indeed aregistered auditor. In fact we regardthe matter as so serious that we wouldhave considered acting in terms ofSection 51(3)(a)(iii) and (iv) of the Act,which refer to the suspension of theright to practice or the cancellation ofthe registration of Mr Ferreira.

In this case his own cancellation ofregistration has disabled us fromconsidering those sections. Weconsidered suspending a fine as wewere urged to do, but we do notbelieve, despite the administrativedifficulties otherwise, that it would beappropriate to send out a message that

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because of those administrativedifficulties the registered auditor whois found guilty of improper conduct hasa financial advantage, and we believethat the administrative difficulties wouldhave to be resolved at a different level.

The sentence that we impose is a fineof R100,000.00 and publication ofthe respondent’s name as well as thename of his firm, plus an appropriatesummary of this judgment in IRBANews.

SECOND MATTER

On 7 May 2007 the committee heardthe case against Mr [S].

The facts appear from the sentencewhich was handed down by thechairman of the committee Adv vander Linde SC, as follows:

Finding:

In this matter Mr [S] was found guiltythis morning on his own plea on 5charges. The charges are of improperconduct but in three manifestations.

The first is in that Mr [S] contravenedor failed to comply with any provisionof the Act with which it is his duty tocomply.The second is that he contravened orfailed to comply with any provision ofany other Act, with which it is his dutyto comply in his capacity as accountantand auditor to an undertaking, or indoing work of a type commonlyperformed by a registered accountantand auditor.

And the third is that he, withoutreasonable cause or excuse, failed toperform any work or duties commonlyperformed by a practitioner with sucha degree of care and skill as in theopinion of the board may reasonablybe expected, or failed to perform thework or duties at all.

A charge which relied on rule 2.1.4,was not persisted in. …

Mr [S] testified in mitigation. He saidin summary that when he wascontacted about the investigation onthe 20th July 2005 he co-operatedimmediately and in particular gave to[the Board’s investigator] when called

for them, his working papers.

In relation to charge 1, concerning the[XYZ] audit, he said that Mr [A] is anattorney at [B] and that he had beendoing his trust audit since about 1999. His records were impeccable and hehad a freelance bookkeeper who usedthe WINLAW accounting system. In2004 the bookkeeper stoppedworking for Mr [A] and Mr [A] wasnot able immediately to find areplacement. In the result, the audit ofthe trust account was long overdue.This had to be done by31 August 2004 in respect of the yearend here concerned, being29 February 2004. He said that heestablished that the WINLAW systemin the case of Mr [A] was also kept ona spare computer where there was afull backup and therefore that fullbackup afforded access to the trustaccounts kept in the books of Mr [A].

He instructed his clerk, Mr [M] tointerrogate each of those accounts asreflected in that computer databaseand he, Mr [M], recorded them all onExcel and therefore this enabled Mr[M] to audit the trust balances. Mr[M] reported after his work to Mr [S]to the effect that a qualification oughtto be appended in respect of theperiod ended 29 February 2004.That report of Mr [M] as well asanother report of Mr [M] also to theeffect that the audit ought to have beenqualified appears in EXHIBIT C.

Mr [S] considered theserecommendations of Mr [M] butdecided not to qualify the certificateon the basis that there was no trustshortage.

Regarding the second charge, Mr [S]admitted that there were shortcomingsin the audit, particularly in regard tothe retaining of documentary evidenceof the audit work carried out, but hesays that he has since appreciated theerrors of his ways in that regard, andin fact in three attorneys’ audits sincehas qualified his opinion.

The third charge related to the auditof attorney, Ms [B]. He said he hadknown her for some four years andbefore he audited her trust account heaudited that of her father. He said thather trust account always balancedevery month, every year and in fact

also for the year ended February2005. However, in the case of Ms [B]he established a trust shortage in theyear February 2005. His clerk pickedit up. It turned out that a Mr [V] hadstolen some R102,000 from her andshe made this good with a deposit ofher own monies, and this led toestablishing the trust shortage.

Further, through his clerk Mr [S]established that Ms [B] was chargingthrough her trust account expenseswhich were being used by her live - inpartner in his business. He said thatas an articled clerk he got theimpression that it appeared to benormal practice in the case of manyattorneys that they receive all moniesin their trust account and from thereclear appropriate transfers to businessaccount. He said he established thatMs [B] issued cash cheques whichwere used by her partner to settlecertain accounts on her behalf, thesecash cheques being drawn against thetrust account.

However, the shortage was mainlyattributable, he said, to the funds stolenby Mr [V]. He, despite knowledge ofthese facts, decided that he would notqualify that certificate because in hisview the Fidelity Fund was not at riskbecause the shortage had been madegood.

As regards the 4th charge heconceded, as he had in relation to theaudit of [XYZ], that there wasinadequate audit evidence of the auditcarried out. He said that with a oneman practice often audits are not asstudiously performed in the sense ofretaining audit evidence as they arein larger audits. He said that he willmake sure that in the future, were hepermitted to continue practising as anauditor, that there would be properaudit evidence of the audit carried out.

In summary in relation to charges 1 to4, he said that he understood that theyall concerned the attorneys FidelityFund and that the rules are designedto enable an auditor to report onbreaches of the rules, not only breachesthat are still evident as at the twoselected dates but also in the interim.

Regarding the 5th charge, that relatingto [EFG] Pty Ltd ‘[EFG]’, he explainedthat he had met a Mr [G] in 1984

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when Mr [G] was an auditor for acompany for which he was working.Mr [S] himself registered in 1987 andin 1992 acquired his own practice andslowly built it up. Mr [G] went intoliquidation and asked him to performthe attest function of his clients. Initiallyhe would go to Mr [G]’s offices andthere perform the attest function afterpresentation of the files.

In 1994, this activity moved to his ownoffice and the review files would bebrought to him there. Now this involvedabout two to three of Mr [G]’s clientsper month and EFG was one suchclient.

The audit work would be performedby Mr [G]’s staff, and in the case ofEFG the person who did it was a Mr[Sl]. In the case of this particular audit,Mr [W] and Mr [G] came to see himafter he had called them to come andexplain certain features of the audit.There were certain explanations givenby Mr [W] relating to the entryrecorded in the working papers,concerning accounts receivable andan amount of some R1.5 million enterednext to the name of [BANK], and heaccepted that explanation. However,the truth of the matter is set out in areport by a Mr [RA] of [Firm]. At thatpage in paragraph I, he writes:

“Furthermore, there is some concernby us with regard to the amount ofR1.5 million reflected in the debtors. This amount to the best of ourknowledge represents a withdrawalfrom the company’s call accountby the directors or shareholders inproportion to their shareholding ofan amount of R2.5 million. TheR2.5 million is then adjusted byjournal 22, whereby the sundrydebtors account is then reduced by1 million to reflect 1.5 million andthe creditors are equally reducedto 1 million. It appears that thecreditors account is a ‘dumpingground’ for some strangetransactions, hence the reluctanceof Mr [G] to supply us with thebreakdown of trade creditorsreflected in the balance sheet.”

Mr [S] testified that had he notaccepted Mr [W]’s explanation andhad he enquired further he would havecome to the same conclusion that Mr[RA] came to here, and his fault lies

therein that he accepted theexplanation when he should not haveaccepted the explanation. He did notsay, Mr [S], what he would have donehad he come to the conclusion as didMr [RA], that the creditors account isa ‘dumping ground’ for some ‘strangetransactions’.

He said with reference to certainjournal entries, that he could not explainthe assertions. It is asserted is thatthere were no explanations for certainunusual journal entries, the journalentry narrations merely being ‘prov[G]’ and ‘[G]’ respectively. Onejournal entry debits expenses andcredits current liabilities by R2.33million and the other journal entrydebits current liabilities and creditscurrent assets by R1 million. He saidhe did not look at these. He said thathe sat with the financials and the leadschedules and worked through those. His evidence in this regard, that is tosay that he did not look at these journalentries, were not taken further with himin cross-examination. He concedesthat he ought to have looked at thoseentries and that he should have goneto the next journal, but at the time theexplanation given to him seemedplausible.

With reference to directors emoluments,he said that it was explained to himthat EFG was paying rental of someR42 000,00 per month to Mr [J], whowas also a director but not VATregistered. This amount wasaccordingly reflected as part of thedirectors’ emoluments or salary and itwas then taxed in the hands of thedirector receiving those emoluments.The difference between the directors’emoluments figure of R630,000.00appearing in the lead schedule andthe similar figure appearing in thefinancials is explained in that regard.

As regards the difference between thesigned and unsigned financialstatements, he says that it was an erroron his part and that he should haveensured that the signed financialstatements were placed in the workingpapers.

He testified to his own previousconvictions, saying that he failed asecond cycle peer review in May2004. He was convicted by the

Investigating Committee of this boardin May 2004 concerning a matter inwhich Mr [G] did not want to resignas an auditor. The client wanted toterminate Mr [S]’s services. This personwas previously a client of Mr [G]. Thiswas investigated by the committee andhe was fined, he said he thoughtsomewhere between R5,000 andR10,000.

[The chairman discussed the argumentspresented and then continued]

Mr [G] is in the background both ofthe [XYZ] audit and the [EFG] audit.

Regarding the [XYZ] audit he said thathe first audited their accounts in theyear ended 2001. He knows that thecertificate of the kind issued to the LawSociety in terms of rule 70 of the rulesof the Law Society of the NorthernProvinces, is required to ensure thatattorneys keep proper accounts, thatthey keep proper book of trust accountreceipts, proper books of trust bankaccounts and that they do not abusetrust funds. He knows and appreciatesthat the Law Society relies heavily onthe reports given by independentauditors.

In the case of Mr [A]’s trust accounthe decided that he would not qualifyit despite Mr [M]’s recommendationbecause he thought that there wouldbe no prejudice to the Fidelity Fundand the Law Society. Looking backhe agrees now that it is a very seriouscontravention not to have qualified thatcertificate. He says that although hethought about it he concedes that hedid not adequately apply his mind toMr [M]’s recommendations.

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He was cross-examined as to hisstatement that in fact there was no trustshortage in the [XYZ] account, andthere were certain entries he did notnor could explain. He said that hetried to help Mr [A] by giving thisunqualified certificate and appreciatesnow that he should not have done so. He should not have placed his ownreputation at stake.

Regarding Ms [B]’s audit, he said thathis first audit in respect of her accountswas in the year ended 2003. It wasput to him that in the case of Ms [B]there was a fairly gross dereliction ofduties and he did not dispute that. Itwas put to him that in her case trustmonies were being used for personalexpenses and that this was very serious,but his response to that was that hehad seen that some attorneys receiveall their monies into their trust accountand use that account to clear outexpenses to business and otheraccounts.

He is appreciative of the fact that thereis a rule that they ought to be keptseparate and he was referred to ajudgment in the matter of Law Societyv Meyer in this respect. He says nowlooking back he appreciates theseverity. He says that however, anyshortages that there were in Ms [B]’strust account had been made good bythe dates in respect of which thecertificates had to be issued and to hismind the risk by then had gone. Heappreciates that there was a trustshortfall, and appreciates that in effectthe trust account had lost its separateidentity as a trust account. Heunderstood that the Law Society reliedon him but said that in small practicesthere is inevitably, certainly on his part,a lack of appropriate discipline in theauditing of their books. He knew thathe should comply with the prescribedauditing standards, however also whenit comes to small firms.

Clearly there was no compliance withthe audit evidence requirements andhe conceded this. As regards [EFG],he explained that he has acted as anauditor for a large number of for clientsof Mr [G]. He says that at that timewhen he was acting for Mr [G] in theseinstances the standard of the auditscarried out in those instances was thesame as the standard here. By that hecould only have meant that it wasequally poor.

He said that he did not share officesor staff with Mr [G], but Mr [Sl] wasarticled to him for about four years until2006 and then went to work for Mr[G]. Mr [Sl] operated from Mr [G]’soffice but was articled to him, butalthough he knew he needed boardapproval he did not have that. Hementioned also that there was anotherperson, but that line of evidence wasnot taken further. He said he met withMr [Sl] on a monthly basis and thatMr [Sl] is now in industry. He said thatthe registration fees payable in respectof Mr [Sl] were paid by him, but Mr[G] repaid him.

This evidence led to it being put to himthat he was ‘fronting’ for Mr [G], towhich his response was that he guessedthat that was so having regard to theevidence. He knows that that is wrongbut said that he did not know then thatit was wrong. He said that Mr [G] wasdriving these audits. He said that if hewere allowed to continue practisingthat relationship would be terminatedimmediately.

In response to questions from the panel,it appeared that some 40% of hisannual fees are derived from the attestfunction, that in effect he was not aufait with the working papers and theimpression certainly was that he left itup to Mr [M], referring to the [EFG]audit.

[The chairman discussed the argumentspresented and then continued]

Sentence

In considering an appropriatepunishment we took into account, as Ihave said, on the one extreme theabsence of proven dishonesty. Thatwould militate against an unqualifiedcancellation of the registration of Mr[S] under Section 51(3)(a)(iv).However, if we were simply toovercome that difficulty by, as it were,by cancelling his registration andsuspending the cancellation it wouldmean that Mr [S] would be able toproceed with audits, and it is ourconclusion having regard to the severityof the offences that the public oughtnot to be open to an audit which iscarried out in so bad a fashion.Therefore in order to protect the public,and by public I mean the Law Society,the Fidelity Fund and other interestedparties, the effect of the punishment

that we impose has to be in our viewto remove Mr [S] effectively for a periodfrom his right to practice as a registeredauditor.

In coming to that conclusion we hadregard to two judgments in the SupremeCourt of Appeal concerning attorneys. I read merely from the case summary. The one in the matter of KJR Summerlyv The Law Society of the NorthernProvinces, where the case summaryreads:

“Attorneys struck from the role bythe court a quo misconduct notinvolving dishonesty’, decided thathe should rather be suspended frompractice with further restrictionsimposed after expiry of suspension.”

In the matter of the Law Society of theCape of Good Hope v Henrietta Peter,the summary reads:

“Attorney misappropriation of trustmonies. Whether a court a quoshould have struck the name of theattorney concerned from the rollrather than suspending her for aperiod and subjecting her to certainrestrictions for a further period.”

In this case the appeal by the LawSociety in the case of an attorney whohad a shortfall in the trust account andwhom the High Court had suspendedfrom practice for a year, not removedher name from the roll and hadimposed restrictions on her practiceafter that period of a year wasdismissed by the Supreme Court ofAppeal.

In other words, the effect of thejudgment of the Supreme Court ofAppeal was not to strike the attorneyfrom the roll, despite a shortfall in thetrust account because there was nodishonesty but effectively suspendingthe attorney from practising for a periodof two years.In our view the appropriate punishmentis therefore the following:• In terms of Section 51(3)(a)(iii), Mr

[S]’s right to practice as a registeredauditor is suspended for a periodof two years.

• Secondly, publication of the factsand conclusion of this matter is totake place in ‘IRBA News’ but Mr[S]’s name is not to be disclosed interms of Section 51(5) of the Act.

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• Thirdly, Mr [S] is directed to makea contribution to the costs of thisenquiry in an amount of R45,000in terms of Section 51(4).

To clarify therefore, there is noimposition of a fine. Secondly, thereis an order in terms of Section

51(3)(a)(iii) to suspend his right topractice as a registered auditor for aperiod of 2 years, and for purposes ofclarity we direct that that suspensionwill take effect on the 1st July 2007.

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Queries: Jane O’ConnorDirector: LegalTelephone: (011) 622-8533Facsimile: (011) 622-4029E-mail: joconnor@irba.co.za

Queries: Caroline GarbuttRegistrar

Telephone: (011) 622-8533Facsimile: (011) 622-4029E-mail: cgarbutt@irba.co.za

REGISTRY

CPD POLICY

An article on page 12 of the Nov/Dec2006 issue of the IRBA News, andother queries we received on therelease of the IRBA’s CPD policy, hasresulted in questions from RegisteredAuditors on the application of the policy. This communication seeks to provideanswers to some of these questions.

The article addressed the procedurewhich would be followed when aperson wished to register with the IRBAmore than three years after

(a) they were last registered with theIRBA;

(b) they passed the PPE; or(c) they completed their training

contract,

whichever is the later.

Where an applicant is in this situation,an assessment would be conductedwhich evaluates the individual’s basisfor registration. This would include aconsideration of compliance with theIRBA’s CPD policy during the periodprior to the registration application.

In instances where the applicant’s CPDis fully compliant, an interview wouldnormally suffice to support theapplication for registration.

Where the CPD is not fully compliant,or not compliant at all, a more extensiveproficiency assessment would normallybe conducted.

The nature and depth of the proficiencyassessment could take a number offorms, including the applicantperforming a review of an exampleworking paper file, or re-writing thePPE. The level of the proficiencyassessment would depend on the extentand degree of non-compliance with theCPD policy, and could take into accountthe reasons and duration of the periodof non-registration.

We appreciate that there are numerouscircumstances which could give rise tothis situation, and these circumstanceswill be taken into account in evaluatingsuch applications.

For further information on CPD andproficiency assessments, please contactUgandra Naidoo, Director: Education,Training and Professional Development.

For further information on registration,please contact Caroline Garbutt.

INDIVIDUALS ADMITTED TO THEREGISTER OF THE BOARDFrom 01 FEBRUARY 2007 to 31 JULY2007

Acker MadeleinAlt Andrew Ivan GeorgeAmod Ebrahim YusufAntiglevich SimonArendse Natalie RoselineAucamp MandieBailie Daniel HermanusBall Mark RobertBhagwan Dharmesh NatvarlalBhamjee MohammedBhana PrameshBhikha YateshBoshoff Ralie JohannaBosman Berton JohnBotha CarnelBotha ChrisBotha PieterBruwer Tertius ScholtzBurger ConradBurger JonetteChauke Vonani JusticeChigumba Ian AnesuChitima NelsonCinnamond Gareth WilliamClaasen Barend JacobusCloete FerdinandCoetzee Aletta MagdelenaCoetzer NicoDe Beer Lynette CorneliaDe Beer Matthys Christoffel JohannesDe Bruin CarinDe Jongh AnineDe Villiers Pieter Ignatius Du PlessisDell LornaDickason Cecil Rian WesselsDikana Kali JosephDonaggi Lambert Colyn

Dreyer Edward Frederick GreenalfDuarte Natalia LimaDurand Anna Catharina GysberthaEastman Michiel AdriaanEbrahim ShenaazEls Cornelius AlwynFakir TasnimFebruary ClaudetteFelstead EugeneFourie Johannes JacobusGaffar MansoorGaleni NomfuyoGeel SuzanneGordon BryanGoussard HeleenGouvias Vivienne RoseGreeff Marlene EtresiaGroenewald AndreGroenewald Jan MarthinusHamman Marthinus ChristofHechter LynetteHeggie Lisa JoyHillier LaraHlongwa Musawenkosi SibusisoHugo Jean AntonHurter Pieter MareeJacobs Richard JamesJones JudiJonker Andries Jaco JoosteJordan Thwalazidanga MgcinisihlaloJoubert Christiaan FriedrichKalan Anant BhanaKgoedi YvonneKhan AmanullahKhula Tlhogi DanielKnoesen Darryl IanKotze Suné'83Kroh JensKruger Dorathea JohannaLabuschagne Jan Frederik DanielLaing RiaanLange MartinLemmer Johann Casper

Levisohn RobinLindeque BarendLockhat Suleman YusufLombard Gregory StephenLouw HenzLouw MarelizeMalaba Nhlanhla Kelvin SiphoMapaure Cynthia NomsaMarti Tania CherylMartin Kim TarynMauer Jacqueline MaryMazarura Bothwell AnesuMcnair Clinton GrantMhlwana Ziphiwo MadododwaMollagee OsmanMorgan Gareth JamesMoroole Bogabale BerlinahMustard ClintonNadrowski Tamzin AnneNagy ImreNaidoo Jonathan JoelNaran Joshila AshokkumarNejthardt MalgorzataNel CarlaNgoasheng Isaac LesetjaNinan Modayil VargheseNosworthy BronwynOlls IanOosthuizen Daniel JohannesPardoe Emma SusanPeer IrshaadPope Peta-lynnPrins AlbertoRamnarian KeeranRanchod NitaReintjes Ciara CraulRobertson Denis AlexanderRoesch Hendrik PetrusRossouw Andries JacobusSahd AlecSathekge Samuel MathabaSavage David WayneSchaafsma Tjaard August

26

CONTINUED

REGISTRY

27

CONTINUED

REGISTRY

Schoeman Louis JohannesSchoeman LucindaSchonegevel Sidney CecilSchutte Josef ChristiaanSeedat Imraan Gulam MohamedSemenya Derrick PhutiSexton Garreth JohnSinclair GreigSithole SamuelSlabber IlzeSmi t John Morgan O'kennedySnyman Salomien JudithStalley Elton CliffordStander LindieStevens John EdwardStuckie Melissa AnneSukati Mmathabo AbigailSwenson BjornTaljard Timneen Jo-anneTayob Taznin Abdul SattarTeixeira Karen ElizabethTerblanche WernerTheron IngeTimpany DeneTrolese NinoVan Der Schyff Willem NicolaasVan Niekerk JohannesVan Tonder Johannes TheodorisVan Wyk TanyaVan Wyk YolandieVan Zyl PierreVerburg Johannes GerhardusViljoen Herman SteeleVivier VivanWentzel Penelope-pearlWilkens WilcoWilson PaulWindell Wayne KurtWright Glenn DavidXaba Rosetta Ntambose

INDIVIDUALS RE-ADMITTED TO THEREGISTER OF THE BOARDFrom 01 FEBRUARY 2007 to 31 JULY2007

Abakah-gyenin Meshach MightyAbrams Clifford LawrenceBoshoff Riaan RoelofBosman ArmandCairncross John MichaelCajee Zeinoul AbedienChikweshe OliverCox WillemDe Swardt Louis StephanusDixon Dorothy RoseEbrahim Fatima Abdul SamidEls Frans Sarel JacobusFenn Douglas RodneyFialkov KevinGcabashe Tsediso ZwelethuGoosen Daniel Johannes AndriasGriesel RynoHorn Anthony RichardKaidos Martins Helena SevastiKorsten Jan Hendrik MahoneyKwinana NtombiyakheLabuschagne Christo PieterLe Roux DanielleLiebenberg Schalk WillemLubisi Mashangu RonnyLucouw PierreLungoomiah RajModipane Tebogo CollenMuller BeyersNgwenya Zanele ZipheleleOdendaal Samuel Daniel HermanusOmar Carrim YacoobPalmieri RobertoPlenderleith David Peter WynnPretorius Willem Jan HendrikRaubenheimer Margaret Eunice

Rossen Nicholas BarnRossouw Wynand HendrikSayers John Meyrick WilliamSingh Premnath InderSithole StefaanVan Der Laan Jacob GeertVan Der Merwe MariusVan Der Walt Izak Hamilton Du PlessisVan Dyk Adriaan SarelVan Dyk Theodorus BernardusVan Zyl Francois AndreVan Zyl Jacobus FrederickWallis MavourneenWellen Sean WalterZulu Maqhinga JohannesZulu Thabani Francis

INDIVIDUALS REMOVED FROM THEREGISTER OF THE BOARDFrom 01 FEBRUARY 2007 to 31 JULY2007

Aitken Douglas Henry (Resigned)Alt Stephan Howard (Resigned)Asmal Mahomed Azam Ebrahim(Resigned)Bals Glen (Resigned)Barnfather Samantha Anne (Resigned)Barraclough Ashley Craig (Resigned)Barrett Basil Henry (Resigned)Bayant Aysha (Resigned)Berry Brian Herbert (Resigned)Bester Joachim Paulus (Resigned)Beukman Gawie Frederik (Resigned)Bezuidenhout Cornelis Jansen (Resigned)Black Julius (Resigned)

28

Boner Frank (Resigned)Boshoff Willem Hendrik (Resigned)Bosman Melanie (Resigned)Botes Johannes Jurgens (Resigned)Bovens Robyn Gail (Resigned)Boyle Robert Sydney (Deceased)Brown Graham Keith (Resigned)Bucke William Neville (Resigned)Budlender Stephanie Glenn Alison(Resigned)Cambanis Gregory Basil (Resigned)Cane Joel Mark (Resigned)Carreira Richard George (Resigned)Castleden Michael John Royal (Resigned)Cerva Renato Vincent (Resigned)Claassen Jacob Willem Stephanus(Resigned)Clark Shaun (Resigned)Coetzee Jacobus Stephanus (Resigned)Cornelissen Hendrik Albertus Rudolf(Resigned)Cowie Ian Reginald (Resigned)Cronje Willem Bartholomeus (Resigned)Crous Daniel Jacobus Johannes(Deceased)David Israel Oscar (Resigned)Davis David Harris (Resigned)De Jongh Tessa Val (Resigned)De Klerk Johan Nico (Resigned)De Man Anko (Resigned)De Wet Hendrik Christoffel (Resigned)Dey Christopher Ian (Resigned)Dixon Lewis Alan (Resigned)Drew Llewellyn (Resigned)Dreyer Hugh Ross (Resigned)Du Plessis Johannes Christoffel (Resigned)Du Toit Tobias Petrus (Resigned)Du Toit Willem Joubert (Resigned)Fakie Shauket Allie (Resigned)Fanarof Basil (Resigned)Flaum John Mitchell (Resigned)Fourie Johannes (Resigned)Furman Leonard Charles (Resigned)Geel Suzanne (Resigned)Gelbart Meyer (Resigned)

Gemmel Keith Melville (Resigned)Gronsbell-luntz Seth Wilfred (Resigned)Hampton Trevor John (Deceased)Harmsworth Colette Sue (Resigned)Hastie Trevor Alexander (Resigned)Haumann Paul Roux (Resigned)Haupt Phillip Karl (Resigned)Healy Graeme Frederick (Resigned)Henning Kathryn Edith (Resigned)Henwood Douglas William (Resigned)Hislop Raymond Scott (Resigned)Hoek Albert Christiaan Johan (Resigned)Hoole Adrian Hawksworth (Resigned)Howell Ulrich Michael Martin(Deceased)Jackson Alan John (Resigned)Jayes Stuart Samuel (Resigned)Johnson William Eric (Resigned)Joubert Andreasa (Resigned)Joubert Marthinus Andries (Resigned)Kaidos George Panagiotis (Resigned)Kalvari Aubrey Isaac (Resigned)Kamstra Peter Richard (Resigned)Katz William (Resigned)Kohler Richard Alan (Resigned)Kotze Hendrik Nicolaas (Resigned)Lack Woolf (Resigned)Lategan Marthinus Theunis (Resigned)Lemmer Johannes Jacobus Francois(Resigned)Levitt Stanley (Resigned)Ligthelm Anina (Resigned)Lorgat Haroon (Resigned)Lotter Berendina (Resigned)Lowe Barry Arthur (Resigned)Macdonald Graham Alastair (Resigned)Maddock Graham Allen (Resigned)Maher Kevin Charles Patrick (Resigned)Marsh Martin Graham (Resigned)Matthee Werner Johann (Resigned)Mattheus Stefanus Gerhardus (Resigned)Mayer Paul Clifford Percy (Resigned)Mazwane Mnikelo Moses (Resigned)Mc Creesh Cormac Garrett (Resigned)Mcelligott Matthew Richard Aherne

(Resigned)Mcgough Ian Crawford (Resigned)Mcgurk Patrick Neil (Resigned)Mclaren Susanna Elizabeth Jacoba(Resigned)Meintjes Quentin (Resigned)Miller Reuben (Resigned)Naidu Krishni (Resigned)Nam Delphine Leong (Emigrated)Nel Isak Abrahim (Resigned)Noorgat Mohamed (Resigned)Nyman Peter (Resigned)Oosthuizen Leon Albertus (Resigned)Parker William Devenish (Resigned)Perkel Jonah (Resigned)Perling Stephen Ian (Deceased)Petersen Barend (Resigned)Phelps Leonard Stephen (Resigned)Philip John Melvin (Resigned)Pieterse Izak Jacobus Du Plessis(Deceased)Pieterse Magdalena Johanna (Resigned)Pollard Daniel Brachya (Resigned)Potgieter Christoff Werner (Resigned)Potgieter Leon (Resigned)Pretorius Rehan (Resigned)Pretorius Stuart Michael (Resigned)Prior Colin Robert (Resigned)Pugh Donald Stanley (Resigned)Randall Alan (Resigned)Rice John Cromwell (Resigned)Rom Kim (Resigned)Rouessart Reginald Philip Roy (Resigned)Rubin Vivian Dudley (Resigned)Rubinstein Boris David (Resigned)Salomon Frank Selwyn (Resigned)Sandler Denis (Resigned)Schmarr-meisel Melita (Resigned)Scholtz Russel (Resigned)Sitabule Victor (Resigned)Sloane Michael Raymond (Resigned)Smit Raymond Anthony (Resigned)Smith Alwyn Voyle (Resigned)Smith Donald William (Resigned)

CONTINUED

REGISTRY

29

Stanford David Michael Hartley(Resigned)Stein Steven Ivan (Resigned)Steyn Barend Lukas (Resigned)Strachan Trevor John (Resigned)Strydom Frederick Johannes (Resigned)Strydom Marlize (Resigned)Strydom Shaun (Resigned)Surmany Albert Ivan (Resigned)Swartz Nicholas Dirk (Resigned)Thompson Jack Hatton (Resigned)Timpany Dene (Resigned)Tolson Michael Gow (Resigned)

Trollope John Henry (Resigned)Van Buuren Barend Johannes (Resigned)Van Coller Johannes Christoffel(Resigned)Van Der Merwe Jaco (Resigned)Van Der Merwe Juan Gerard (Resigned)Van Dyk Saartjie Amalia (Resigned)Van Niekerk Denys Laubmeyer(Resigned)Van Niekerk Jacobus Johannes(Resigned)Van Schoor Lucinda (Resigned)Venter Carlie (Resigned)

Volschenk Kobus (Resigned)Wade Kenwyn Budd (Resigned)Ward Peter Kenneth (Resigned)Wartson Shaun Aubrey (Resigned)Watson Larry Cecil (Resigned)Weiner Izak (Deceased)Wessels Gary Anthony (Resigned)West Gordon George (Resigned)Williams George (Resigned)Wilson Elizabeth (Resigned)Withers David Anthony Vaux (Resigned)Wolpert Leonard Lazar (Resigned)Zakuza Temba Stanley (Resigned)

CONTINUED

REGISTRY

Following on from the success of thefirst road show in May/June 2006, theCEO and the IRBA directors embarkedon a second national road show fromlate July to mid-September 2007. Atotal of 17 venues around the countrywere visited over the 7 week period,and the sessions were attended by atotal of 830 registered auditors, traineeaccountants and representatives fromthe offices of the Auditor-General.

There was no charge for the sessions,which included handouts, breakfast orlunch and other refreshments. Attendeesat the 31/2 hour sessions were awardedCPD certificates for their attendance.

It was heartening to see the passionand commitment of RAs all over thecountry, some of whom drove longdistances to get to the smaller venuesand all of whom are united in theircommitment and concern for theprofession.

The feedback that RAs gave on theirevaluation forms has given IRBAvaluable insights into the issues that

need to be addressed, and will assistIRBA to make future presentations evenbetter. The four main topics that RAsconsider most important are:

• Reportable irregularities• Practice review• The sustainability of the profession• The impact of the proposed

corporate law reforms on theprofession

If, for any reason, you were unable toattend one of the information sessions,you are welcome to request a copy ofthe handout material from IRBA’sCommunications Department:

Thabisile: tnzuke@irba.co.zaor Joanne: jjohnston@irba.co.za

NATIONAL ROAD SHOW

IRBA INFORMATION SESSIONS

Queries: Joanne JohnstonManager: Communications

and PublicationsTelephone: (011) 622-8533Facsimile: (086) 524-6131E-mail: jjohnston@irba.co.za

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IRBA INFORMATION SESSIONS

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ETHICSA MEMBERSHIP

IRBA is proud to announce that it is now an organisational member of the Ethics Institute of South Africa(EthicSA), with effect from August 2007. EthicSA is an independent non-profit organisation whose mission itis to promote and advance ethical practices in South Africa – in the public and private sectors and in theprofessions. For more information on the organisation visit www.ethicsa.com

OBITUARY

MISS DOROTHY MAY ATHERSTONE, JUNE 2007

We were saddened to hear of the deathof Miss Dorothy Atherstone who, at thetime of her death, was the oldest femalemember of the South African accountingprofession.

Miss Atherstone was born on 3 May1914 and was registered with the Public

Accountants’ and Auditors’ Board in1957. She retired from public practicein May 1979, having reached the ageof 65. Miss Atherstone was grantedAssociate Life Membership of SAICAwith effect from January 1980, as shehad been a member for 25 consecutiveyears.

Our sincere condolences go to herfamily, friends and colleagues.

The EditorP O Box 751595, Garden View, 2047, Johannesburg

Docex 158, Johannesburg

E-mails to be addressed to: Bernard Peter Agulhas at bagulhas@irba.co.zaor Joanne Johnston at jjohnston@irba.co.za

Website: http//www.irba.co.za