Mandatory Audit Firm Rotation is in the News – Will it Apply to You?
Minimum Wages for Domestic Workers Increased
November 30, 2016Don’t Miss Your Deadline for Employment Equity Reports
November 30, 2016There have been many articles in the financial press over mandatory audit firm rotation (MAFR). This followed an announcement by the Independent Regulatory Board for Auditors (IRBA) that they intend to implement MAFR in South Africa.
MAFR is intended to strengthen auditor independence to enhance audit quality. There is no universal acceptance or rejection of MAFR, and it has been controversial in some of the countries where it has been introduced, including countries that have introduced it only to have it repealed later; hence the heated nature of some of the discussions and articles.
Currently, the IRBA has initiated a public consultation process (due to end on 20 January 2017) on its plan to introduce MAFR in 2023 for listed companies only. These JSE companies will have to rotate auditors every ten years.
Thus, it is at least several years off and, although media reports led many small companies to worry that they would be caught in the net, it will in fact only impact listed entities.