2013年-世界发展银行全球_South_Africa___Report_on_the_Observance_of_Standards_and_Codes--Accounting_and_Auditing_55页_3mb

Summary of the South Africa Report on the Observance of Standards and Codes – Accounting and Auditing (ROSC A&A)

Core Content

The South Africa Report on the Observance of Standards and Codes – Accounting and Auditing (ROSC A&A), conducted by the World Bank in 2013, evaluates the country's accounting and auditing systems, focusing on the private sector and comparing them with international standards and best practices. The report provides an update on the implementation of the 2003 ROSC A&A policy recommendations and identifies systemic weaknesses in the institutional framework that need strengthening. It also highlights good practices and proposes policy recommendations to enhance the quality of financial reporting and auditing in the country.

Main Purpose

The primary objective of the report is to identify reforms that will improve the quality of financial reporting in South Africa. It aims to enhance competitiveness, governance, and financial accountability in both the private and public sectors. The review was conducted at the request of the Minister of Finance and is part of the World Bank’s broader effort to assess and support the development of accounting and auditing standards globally.

Key Findings

1. Implementation of 2003 Recommendations

• All 2003 policy recommendations have been implemented.
• The Auditing Profession Act (2005) established the Independent Regulatory Board for Auditors (IRBA), which oversees auditing standards and ethics.
• The Companies Act (2008) strengthened financial reporting requirements and provided legal backing for financial reporting standards.

2. Accounting and Auditing Standards

• South Africa’s national accounting standards are fully aligned with IFRS.
• National auditing standards are aligned with ISA.
• The country is one of the earliest adopters of IFRS and ISA.
• The King III Code introduced integrated reporting for listed companies, replacing traditional financial and sustainability reports.

3. Professional Accounting Organizations (PAOs)

• There are 12 recognized PAOs in South Africa.
• SAICA (South African Institute of Chartered Accountants) is the largest and most globally recognized PAO.
• CA(SA) remains the most preferred qualification among prospective accountants.
• There is a shortage of qualified accountants and a low retention rate in the audit profession.
• Many accountants are not members of any PAO, which increases reputational risks.

4. Challenges in the Audit Profession

• The audit partnership law does not provide limited liability for individual partners.
• The audit profession is not seen as an attractive career due to unlimited personal liability, high technical demands, and scrutiny.
• IRBA has limited resources and capacity, which affects its ability to conduct rigorous inspections and disciplinary actions.

5. Public Sector Financial Reporting

• Public sector financial reporting is assessed under the Public Expenditure and Financial Accountability (PEFA) framework.
• The Financial Reporting Standards Council (FRSC) has not been adequately resourced to fulfill its mandate.

6. Good Practices

• The JSE and SAICA have collaborated on the Financial Reporting Investigation Panel (FRIP) to improve the quality of financial reporting for listed companies.
• The Thuthuka program and transformation initiatives have improved gender and racial diversity in the profession.

Policy Recommendations

1. Comprehensive Supervision of PAOs

• Enact legislation to regulate both PAOs and audit regulators.
• Create an institution to define and categorize education and training frameworks for different accounting services.
• Align PAO qualifications with specific categories of services (e.g., audit, independent review).

2. Strengthen IRBA

• Improve the inspection methodology to ensure all auditing standards are reviewed.
• Increase independence and expertise of the Inspection and Investigation Committees.
• Expand resources and capacity of IRBA to meet its labor- and cost-intensive responsibilities.
• Increase monetary penalties for disciplinary actions and make sanctioned auditors public.
• Ensure follow-up actions on reportable irregularities are taken and regulators are accountable for their outcomes.

3. Legal Framework for Audit Firms

• Enact a law allowing audit firms to operate as limited liability partnerships (LLPs).
• Encourage professional indemnity insurance to protect firms and practitioners.

4. Enhance Education and Training

• Include public sector modules in the curricula of PAOs and tertiary institutions.
• Increase capacity-building efforts for the public sector.
• Encourage collaboration between PAOs and universities to improve professional development and training outcomes.

5. Support Small and Medium-Size Practices (SMPs)

• Encourage mergers and networking with regional or international accounting networks.
• Use IFAC SMP Committee tools to strengthen professional capabilities and service offerings.

6. Strengthen FRSC

• Provide infrastructure and resources to the Financial Reporting Standards Council (FRSC) to fulfill its mandate.
• Ensure adequate staffing and technical expertise.

Conclusion

The report underscores the importance of a strong institutional framework for accounting and auditing in South Africa. While the country has made significant strides in aligning with international standards, systemic weaknesses remain in regulatory oversight, professional development, and capacity-building. The proposed policy recommendations aim to enhance financial reporting quality, professional accountability, and career attractiveness in the audit profession. A comprehensive reform plan is necessary to support the long-term development of the accounting and auditing sectors in South Africa.