AUDIT
STATE OF PLAY:
MAFR
UPDATE
With less than two years to go until mandatory audit firm rotation comes into effect in South Africa, audit firms, IRBA and CFOs share their insights into the process so far. By Tamara Oberholster
I
n 2017, the Independent Regulatory Board for Auditors (IRBA) issued the rule that public interest businesses must change audit companies every 10 years, thus introducing mandatory audit firm rotation (MAFR). The regulation comes into full effect in April 2023. Ahead of this, many organisations have already adopted the practice – 43 percent of JSE-listed companies, according to Imre Nagy, acting CEO of IRBA. Several of these rotations have happened during the Covid-19 lockdown. This posed new challenges, with audits needing to happen largely virtually. "Not only did we have to cope with an audit and reporting season during lockdown, but we also had a change of auditors, compounding the challenge as they don’t know your environment, and both the teams didn’t really know each other,” says Dorette Neethling, CFO at Adcock Ingram. “Our planning also had to include reporting to our controlling shareholder for 11 months of the year, adding another dimension to the workload. I am very proud of my team as they fairly easily adapted to all these changes and challenges.”
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CFO MAGAZINE • CFO.CO.ZA
Hardy Maritz, acting executive director of finance at UCT, explains that the university's entire council changes every four years per its statute, which fell at the end of June 2020. “Given it is our equivalent of a corporate board, we had no option but to make sure we met our original deadlines,” he says. “Given council appoints our audit committee, we also ran the risk of an entirely new audit committee coming into a very complex business. We had this situation four years ago, with no continuity at all from our previous audit committee, and were left with new members wondering what may have caused this. What helped with the audit was that our entire finance team, as well as senior members of our external audit team from EY, were already used to working remotely and online due to us learning to work away from the office during #FeesMustFall.”
How painful is the process? Sean Capazorio is CFO at Aspen Pharmacare. The multinational pharmaceutical group has been using a joint audit model for seven years, with the audit in each
