South African Institute for Drug Free Sport Act, 1997
R 385
Auditing Profession Act, 2005 (Act No. 26 of 2005)Board NoticesIndependent Regulatory Board for AuditorsNew Rules Regarding Improper Conduct and Code of Professional Conduct for Registered AuditorsCode of Professional Conduct for Registered AuditorsPart B : Registered Auditors in Public PracticeSection 220 : Conflicts of Interest |
| 220.1 | A registered auditor shall take reasonable steps to identify circumstances that could pose a conflict of interest. Such circumstances may create threats to compliance with the fundamental principles. For example, a threat to objectivity may be created when a registered auditor competes directly with a client or has a joint venture or similar arrangement with a major competitor of a client. A threat to objectivity or confidentiality may also be created when a registered auditor performs services for clients whose interests are in conflict or the clients are in dispute with each other in relation to the matter or transaction in question. |
| 220.2 | A registered auditor shall evaluate the significance of any threats and apply safeguards when necessary to eliminate the threats or reduce them to an acceptable level. Before accepting or continuing a client relationship or specific engagement, the registered auditor shall evaluate the significance of any threats created by business interests or relationships with the client or a third party. |
| 220.3 | Depending upon the circumstances giving rise to the conflict, application of one of the following safeguards is generally necessary: |
| (a) | Notifying the client of the firm's business interest or activities that may represent a conflict of interest and obtaining their consent in writing to act in such circumstances; or |
| (b) | Notifying all known relevant parties that the registered auditor is acting for two or more parties in respect of a matter where their respective interests are in conflict and obtaining their consent to so act; or |
| (c) | Notifying the client that the registered auditor does not act exclusively for any one client in the provision of proposed services (for example, in a particular market sector or with respect to a specific service) and obtaining their consent to so act. |
| 220.4 | The registered auditor shall also determine whether to apply one or more of the following additional safeguards: |
| (a) | The use of separate engagement teams; |
| (b) | Procedures to prevent access to information (e.g., strict physical separation of such teams, confidential and secure data filing); |
| (c) | Clear guidelines for members of the engagement team on issues of security and confidentiality; |
| (d) | The use of confidentiality agreements signed by employees and partners of the firm; and |
| (e) | Regular review of the application of safeguards by a senior individual not involved with relevant client engagements. |
| 220.5 | Where a conflict of interest creates a threat to one or more of the fundamental principles, including objectivity, confidentiality, or professional behaviour, that cannot be eliminated or reduced to an acceptable level through the application of safeguards, the registered auditor shall not accept a specific engagement or shall resign from one or more conflicting engagements. |
| 220.6 | Where a registered auditor has requested consent from a client to act for another party (which may or may not be an existing client) in respect of a matter where the respective interests are in conflict and that consent has been refused by the client, the registered auditor shall not continue to act for one of the parties in the matter giving rise to the conflict of interest. |
