M1 NOCLAF

Question 1

What is a reportable irregularity?

Answer 1

According to section 1 of the APA,

• it is a unlawful Act or omission
• committed by management
• which
• has or is likely to cause material financial loss to the ENTITY or related perosns (could be a lawsuit) OR
• is FRAUDELUET OR
• amounts to theft
• represents a material breach of any fiduciary duty

In order to report it
* you must be the registered auditor of the company
* be satisfied or have reason to believe that the other requirements have been met

Question 2

What should you do as an auditor if you uncover a reportable irregularity?

Answer 2

According to some section you should do the following

• without delay, send a written report to the IRBA giving particulars of the reportable irregularity
• within 3 days of sending the report to IRBA, notify the members of the board in writing of sending the report to IRBA and the provisions of this section
• as soon as reasonably possible but not later than 30 days from when the report was sent do the following:
• try to discuss the report with the members of board
• give board apportunity to make representations in respect of the report
• send another report to IRBA whether the IR didn’t exist, was stopped, still exists

Word: WWATGS

Question 3

How should a public practice accountant respond to non-compliance to laws and regulations

Answer 3

according to Section 360 if the SAICA code of professional conduct, you need to STATE what the standard says and then APPLY the following steps: OADD

1. Obtain an understanding of the matter
2. Address the matter if you are the auditor or report the matter to the external auditor
3. Determine whether further action is needed
4. Document all the happenings

The more specific details are in bold in the CPC

Question 4

What is the difference between a public practice accountant and a business accountant

Answer 4

A public practice accountant provides services on a fee-for-service basis to the public and these services include auditing, accounting, taxation and business advisory services. They are required to comply with extra sections of the Code

business accountants are professionals that work for a single employer and don’t offer services in to the public, they do not have to apply all the sections such as a public accountant, only some

Question 5

How should a business Accountant respond to discovering non-compliance?

Answer 5

• when responding to non compliacne he must ensure that he acts according to his principles of professional behaviour and integrity
• in order to ensure that this is a reportable case, all the following
• is it an act by someone of management with in the company?
• is it in contravention of the prevailing laws and regulations?
• Then state if you are dealing with a senior Chartered Accountant or not

Then

if you are, you need to STATE what the standard says and then APPLY the following steps:
1. Obtain an understanding of the matter
2. Address the matter
3. Determine whether further Action is needed
4. Documentation

Follow the prompts in bold under each heading in the code

if you are not, you need to STATE what the standard says and then APPLY the following steps: