FREQUENTLY ASKED QUESTIONS (FAQs)

 

This FAQ aims to inform and update members and stakeholders about the current state of what SAICA is doing to address allegations of improper conduct against CAs(SA) in an effort to restore trust in the profession.

DISCIPLINE

It takes time to conduct investigations fairly and thoroughly, particularly as SAICA has no power of subpoena and, therefore, has to go through an investigative process to gather evidence which is presented in the first instance to its Professional Conduct Committee (PCC). If the matter exceeds the jurisdiction of the PCC and is very serious in nature, the case is referred by the PCC to the Disciplinary Committee (DC). However, many cases are finalised at the PCC phase.

The PCC hearings are not open to the public but as soon as a case is referred to the DC, SAICA will inform external stakeholders after having informed the member of the hearing. The public can attend the DC’s hearings. It is further important to note that members are not allowed to have legal representation at PCC meetings, but they are allowed legal representation at DC hearings.

SAICA is determined to restore the public’s trust in a profession whose very reputation is based on ethics and standards. SAICA has previously, and will continue, to discipline members who are found guilty of contravening the SAICA By-laws and SAICA Code of Professional Conduct (the Code). It is, however, vital to hold ethical, fair and equitable processes in disciplining our members who are found to have violated this Code.

SAICA works on the principle that all its members are equal under the law and are innocent until proven guilty. Any instances where CAs(SA) have acted unethically, and thereby contravened the SAICA By-laws and the Code, need to be taken through a fair and comprehensive disciplinary process.

At the end of July 2018, the SAICA Board initiated a thorough governance review of SAICA as an organisation and the profession, including the SAICA disciplinary structures and how we communicate our disciplinary processes. The review will be conducted by specialist advisors on corporate governance and lead by Professor Mervyn King. We hope to provide initial recommendations by December 2018.

We are also relooking all our disciplinary processes and how we communicate these; how we engage in national debates on matters impacting the accounting and auditing professions; and also how we work with other industry bodies and statutory authorities to root out corruption, fraud and negligence. This requires a multi-stakeholder approach that includes global and local accounting member bodies, as well as financial regulatory authorities such as the Finance Ministry, SA Reserve Bank and Independent Regulatory Board for Auditors (IRBA).

Where a CA(SA) is also a Registered Auditor (RA) with The Independent Regulatory Board for Auditors (IRBA), the IRBA must first undertake its investigation and disciplinary process.  Accordingly, in auditing related cases and allegations of improper conduct against registered auditors or former registered auditors, SAICA is obliged to refer the matter to the IRBA and to accept the IRBA findings and in most cases, the sentence imposed by the IRBA in these matters.

The role of cases enrolled before the DC are announced close to the meeting date. Thus, there is no strict order of pronouncement or prioritisation of so-called ‘high-profile’ cases. A matter is enrolled once there is sufficient evidence to take the matter to the PCC and, where necessary, the DC.

265 members are currently in the disciplinary process pipeline.

Due to the complexity and volume of complaints, the SAICA Board has approved the establishment of a specialist compliance division to further resource the investigation and disciplinary team.

Decisions of the PCC may be referred by an Accused member, to the Disciplinary Committee for the matter to be heard anew. If the PCC has cautioned, reprimanded or issued a fine, the member has a right to demand, within twenty-one (21) days after being notified in writing of the sentence, that the matter be referred to the DC. The DC shall consider the matter anew and if it finds the accused guilty of the conduct complained of, they are entitled to impose a sentence more severe than that imposed by the PCC. If an accused chooses to refer the matter to the DC, the PCC sanction shall not take effect until the DC has dealt with the matter.

SAICA’s complaints procedure and disciplinary process is based on the principles of natural justice. The disciplinary process is neither a civil nor a criminal process but a sui generis process, which follows and satisfies the rules of natural justice in that it offers both the complainant and the accused the right to be heard and the right to a fair and unbiased hearing.

In terms of the By-Laws, the findings of the PCC and DC are published on the Institute’s website if these committees order the publication of the outcomes.

Disciplinary Committee hearings of SAICA members have always been public, they have just not been announced. All that has changed is that SAICA now publicises when these hearings will be held when it is in the public interest to do so.

The Board is considering further changes to the SAICA constitution to allow the publication of the outcome of disciplinary hearings. This is in line with worldwide best practice.

This profession is built on trust and the series of investigations now underway, will lay the basis for greater public understanding and transparency by uncovering serious lapses by individual CAs(SA) and ensuring accountability where the SAICA By-laws and Code of Conduct are breached.

Depending on the nature of the breach of the SAICA By-laws or provisions of the SAICA Code of Professional Conduct by any member and upon finding such a member guilty of improper conduct, SAICA’s Professional Conduct Committee may order that the member be:

    • cautioned;
    • reprimanded,
    • fined up to R250 000 (two hundred and fifty thousand rand) per charge;
    • suspended from membership for up to 12 months; or
    • referred to the Disciplinary Committee

SAICA’s Disciplinary Committee may order that the member be:

    • cautioned;
    • reprimanded;
    • fined up to a maximum amount of R500 000 (five hundred thousand rand) per charge;
    • suspended from membership for a period not exceeding five years;
    • excluded from membership; or
    • disqualified from applying for membership permanently or for such period as the Disciplinary Committee may determine, or subject to such conditions as the committee may determine.

SAICA institutes disciplinary proceedings against members on receipt of a formal complaint and once it becomes aware of alleged member misconduct.

In cases where members are alleged to be involved in illegal activities, SAICA liaises with the relevant authorities mandated to carry out public prosecutorial processes such as the Independent Regulatory Board for Auditors (IRBA), the Special Investigating Unit (SIU), etc.

Upon finalisation of these investigations, SAICA will be in a position to complete its own disciplinary processes against any individuals that have not complied with SAICA’s By-laws and Code of Professional Conduct.

SAICA does not have the powers to subpoena, therefore the Institute defers to these authorities prior to finalising its disciplinary processes against its members in cases where members are alleged to be involved in illegal activities.

SAICA liaises with the relevant authorities mandated to carry out public prosecutorial processes. Upon the finalisation of such public prosecutorial processes, SAICA will be in a position to complete its own disciplinary processes.

Each matter of improper conduct is judged on its own merits and with regards to the aggravating and mitigating circumstances involved.

Where the PCC believes that the alleged improper conduct will require the imposition of a sanction greater than the PCC is mandated to impose, including the sanction of exclusion from membership of SAICA, the matter will be referred to the DC for a formal hearing and findings.

The SAICA By-laws also make provision for the Board (through the DC) to cancel the membership of any member who has been removed from an office of trust on account of proven misconduct or convicted of theft, fraud, forgery; uttering a forged document or perjury and has been sentenced in respect thereof to imprisonment without a fine, or to a fine amount to be determined by the Board.

In terms of the Chartered Accountants Designation (Private) Act, 67 of 1993 only members of SAICA are entitled to use the designation of Chartered Accountant, CA(SA). In the event that a person’s membership with SAICA lapses for whatever reason, that person will no longer be entitled to use the Chartered Accountant designation. In the event that SAICA becomes aware of a former member or an individual who has never been a member making use of the designation, the matter will be investigated and will be referred to the police where necessary.

In 2016, 507 complaints were opened at SAICA. Of these, 332 involved trainee accountants accused of improper conduct in relation to examinations. (185 cases have been finalised, leading to 16 individuals being disqualified from 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 DC, 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 the Independent Regulatory Board for Auditors (IRBA) and were referred to the IRBA to investigate as part of the agreed process between the two organisations.

In 2017, 229 complaints received against members and trainees were investigated. 109 were then cleared of any wrongdoing, 9 members were suspended for 6-12 months, 77 were fined, and two were excluded from SAICA membership. With regards to the remaining cases, members were either cautioned, reprimanded, or disqualified from applying for membership or associateship.

As of July 2018, 265 members are in the disciplinary process pipeline.

The following persons are subject to the Institute’s professional authority:

  • Chartered Accountants (South Africa) with the designation CA(SA)
  • Associate General Accountants (South Africa) with the designation AGA(SA)
  • Accounting Technicians (South Africa) with the designation AT(SA)
  • Trainee accountants
  • Training officers

*The Institute’s power to discipline its members derives from the Constitution and the By-Laws