DA files affidavit to IRBA questioning SAA’s audit report
17 October 2016
The DA has couriered an affidavit of complaint to the Independent Regulatory Board for Auditors (IRBA) that requests that IRBA investigate whether or not the SAA auditors were delinquent in their audits of the SAA 2014/15 and 2015/16 annual financial statements.
The SAA auditors failed to qualify the “going concern” assumption contained in the SAA annual financial statements despite a SAA Treasury memo dated the 23/08/2016 to the SAA directors that stated that the proposed R 4,7 billion government guarantee would not be sufficient to ensure that SAA was able to continue trading until the end of the 2016/17 financial year.
Clearly if this were the case the “going concern” assumption made by the SAA directors was not appropriate, i.e. SAA will not be able to continue trading for a period of 12 months from the date of the SAA directors approval, being the 18/09/2016. This memo was dated some 37 days before the auditors signed their audit reports.
On the basis that the “going Concern” assumption made by the SAA board of directors was not appropriate and in terms of the International Auditing Standard 570, the SAA auditors should have included a qualification to state as much in their audit report. This they did not do and they must now justify on what basis they accepted the SAA directors “going concern” assumption despite the written assessment apparently submitted to the SAA directors by the SAA Treasury. What due diligence was done by the SAA auditors that led them to conclude that the SAA directors “going concern” assumption was appropriate?