The South African Institute of Chartered Accountants (Saica) called a press briefing on Tuesday to outline the manner in which complaints and disciplinary processes were handled with respect to members accused of wrongdoing.
The professional body for chartered accountants was responding to pointed questions from the media and its membership in the wake of the ongoing Guptaleaks that have implicated some of its members in state capture, most notably chief financial officer of Eskom, Anoj Singh, and a number of chartered accountants working for audit and consulting firm KPMG, who were auditors to the Gupta companies for 15 years.
Last week Saica briefed its members on exactly what processes were underway in respect of members who were accused of alleged improper conduct.
The body could not divulge these details to the media, but CEO Dr Terence Nombembe, said “you will just have to trust us. We have a clearly defined professional process as to how to deal with these matters, and we are attending to them”.
As part of the qualification, members are required to pledge to abide by a code of professional conduct, both in spirit and application, and to lead by example.
“A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest,” said Nombembe.
While the body does not have the powers to subpoena documents and evidence from persons who are not members of Saica, it can respond to complaints against its members filed by the public.
This initially takes the form of a complaints affidavit, submitted by the complainant to Saica, which is duly vetted by a Professional Conduct Committee (PCC) before being considered for further action. The PCC is also empowered to conduct investigations into alleged improper conduct in the absence of a formal complaint.
In the event a member is found guilty of improper conduct, the PCC has the authority to impose a caution, a reprimand, a fine of up to R250 000 per charge or a suspension of up to 12 months.
Should the PCC believe that the alleged improper conduct would require a greater sanction than the PCC is mandated to impose, the matter is referred to the Disciplinary Committee chaired by a senior advocate and which utilises the services of external attorneys as pro forma prosecutor to present the case. This committee conducts a formal hearing at which oral evidence is led and where accused members are entitled to have legal representation.
Sanctions handed down by this committee include fines up to a maximum of R500 000 per charge and suspensions ranging from a few months to a maximum of five years. In extreme cases, a member can be “excluded” from membership for a maximum period of ten years.
The body can also refer cases to regulatory bodies, like the Independent Regulatory Board of Auditors (Irba) for investigation and sanction.
But it’s not exactly clear how robust the disciplinary process is. In 2016, 507 complaints were opened at Saica, a body which has 42 000 members. Of these, 330 involved trainee accountants accused of improper conduct in relation to examinations. (185 cases have been finalised, leading to 16 individuals being disqualified for applying for membership for periods between 3-12 months. 145 cases are ongoing.)
A further 39 trainees in non-exam cases were brought to the attention of the PCC, leaving 138 complaints that were brought against members.
Overall, as at December 2016, Saica attended to 203 of the complaints opened in 2016: 130 cases were resolved through the PCC, a further 19 at the Disciplinary Committee, 20 complaints were resolved outside of the committees, ten were complaints against persons misrepresenting themselves as Saica members and 24 complaints involved persons holding both membership to Saica and registration with Irba and were referred to Irba to investigate as part of the agreed process between the two organisations.
Where an accused person has been found guilty and sanctioned by one of the disciplinary committees, the PCC and Disciplinary Committee may direct Saica to publish the details of the offence and sanction imposed, the name of the accused person and the name of his/her firm.
The other problem with the disciplinary process is that due to rules of confidentiality, Saica will not inform anyone other than prospective employers and employers whether the person is in good standing.
So, for instance, if Anoj Singh is found guilty of falling short of the requirements attached to being a chartered accountant, no one other than Eskom (his employer) will be aware of this.
This might defeat the whole purpose of trying to protect the reputation and integrity of the other 42 000 members of the body.
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