Regulation of the auditing profession in South Africa

Abstract

As a result of the worldwide spate of financial scandals, society has lost much of its confidence in the auditing profession because of a growing perception that the profession does not act in the public interest. Ineffective regulation is one of the key factors detracting from the value of the audit function, thereby undermining public confidence in the profession as a whole. The opportunity has been grasped in South Africa, as in some other countries, to make changes to the regulatory mechanisms of the auditing profession in an effort to restore trust in the profession. In this article the regulation of the auditing profession in South Africa, according to the Auditing Profession Act, 2005, (implemented in April 2006), is evaluated against the factors that are of importance to an effective and creditable regulatory system with reference to the regulation of the profession in some other English speaking countries with which the South African auditing profession has historical and professional ties. It appears that those factors that are important to a regulatory system are to a large degree addressed by the regulation of the auditing profession in South Africa. This should contribute to restore the trust in the auditing profession.