THE PUBLIC ACCOUNTANTS’ AND AUDITORS’ BOARD (PAAB) PAAB is a statutory board created by an act of Parliament, the Public Accountants’ and Auditors’ Act No. 51 of 1951 (as amended) and is mandated with regulatory oversight of the accounting and auditing profession in Namibia, for the protection of public and investor interest. THE IMPORTANCE OF AUDIT REGULATION Auditing, as a profession, contributes to the health of business in Namibia and in so doing, supports our growing economy. Audit regulation, as with many other forms of regulation, consists of five general elements: the setting of standards, their formal adoption, their implementation in practice, the monitoring of compliance, and enforcement procedures. The regulation of audit is centrally concerned with the issue of ensuring that auditors follow best-practice standards in conducting audits, and are competent and independent; all of this is seen as essential in terms of auditors' capability to detect significant errors/omissions in financial statements and to report faithfully on them. Self-regulation of the profession has largely been replaced by independent regulation, underpinned by a reliance on International Standards on Auditing (ISAs). ISAs are standards adopted and enforced both nationally and internationally under the authority of independent national audit oversight boards (PAAB for Namibia). Oversight boards have themselves formed a new international organisation, namely the International Forum of Independent Audit Regulators (IFIAR). Oversight boards in Africa have in turn formed the African Forum of Independent Accounting and Auditing Regulators (AFIAAR), endorsed by the IFIAR, as a means to strengthen accounting and audit regulation in Africa. PAAB is a member of AFIAAR. Section 21 (h) of the PAA Act No 51 of 1951, as amended, gives the PAAB the power ‘to take any steps which it may consider expedient for the maintenance of the integrity, the enhancement of the status and the improvement of the standards of professional qualifications of accountants and auditors’. KEY COMPONENTS OF AUDIT REGULATION Component 1 – Quality Assurance In order to ensure that auditors comply with
78
w w w. n a m i b i a t r a d e d i r e c t o r y. c o m
auditing standards in the performance of their work, PAAB carries out qualityassurance inspections on all firms and individuals registered for the purpose of offering audit work to the public at a fee. The quality-assurance process is twopronged. Firstly, it checks that the firm has adequate internal quality-control mechanisms in place, for all firms regardless of size: from the big internationally linked firms down to the local, sole proprietors. Secondly, the performance of each individual auditor is checked against the currently enforced standards. When a firm or auditor has satisfied PAAB that they comply with standards (i.e. passed their review), they are placed on a three-year inspection cycle. If a firm or auditor is found to be non-compliant (i.e. failed their review), they are placed on a one-year inspection cycle. Should an individual auditor be found to have failed three consecutive qualityassurance inspections, they will be referred for investigation to the Investigations Department. Component 2 – Investigation This function of regulation deals with two types of matters: individual auditors who have consecutively failed three quality-assurance inspections, and individual auditors who have complaints of misconduct laid against them.
Component 3 – Standards, Codes of Conduct and Ethics for Auditors The International Federation of Accountants (IFAC) is the global authority which prescribes accounting and auditing standards as well as codes for conduct and ethics for accountants and auditors. IFAC periodically releases updates or newer versions of these standards and codes, which PAAB adopts and contextualises for auditors in Namibia. Auditors have the duty of keeping themselves abreast of all changes and adoptions regarding standards and codes of conduct. LODGING A COMPLAINT AGAINST A REGISTERED AUDITOR If any member of the public has reason to suspect a registered auditor of misconduct, they are welcome to lodge a complaint with PAAB. The complaint must be detailed in affidavit format and must also include any supporting evidence. The complaint may be delivered to PAAB in the following ways: Via email: investigations@paab.com.na In person: The Audit Investigator, 3rd floor, Office of the Auditor General, 123 Robert Mugabe Avenue, Windhoek Via post: The Audit Investigator, PO Box 11913, Windhoek
In the first instance, PAAB will investigate the cause for auditor failure. Some causes might be of a nature which rehabilitation can correct; some might be purely delinquent and could lead to an auditor being suspended from practising until such time as they can prove improvement, or to deregistration, which would mean that that auditor will not be allowed to practice auditing anymore. In the second instance, PAAB will investigate claims of misconduct. Any member of the public is free to lodge a complaint of misconduct against any auditor who is registered with PAAB. PAAB may also initiate investigation into the conduct of a registered auditor, which is reported in local media. Depending on the nature and severity of the misconduct an auditor is found guilty of, PAAB may reprimand, suspend or, in extreme cases (where criminality is involved), deregister an auditor. The PAAB Disciplinary Rules (published in the Government Gazette in March 2020) detail the actions/behaviours which constitute misconduct.
THE PUBLIC ACCOUNTANTS’ AND AUDITORS’ BOARD (PAAB) Tel 061-285 8467 Email secretariat@paab.com.na PO Box 11913 123 Robert Mugabe Ave, Windhoek www.paab.com.na www.facebook.com/PAABNam