South African Journal of Economic and Management Sciences
versión On-line ISSN 2222-3436
versión impresa ISSN 1015-8812
MAROUN, Warren y WAINER, Harvey. To report or not to report: in what context is a 'reportable irregularity' reportable?. S. Afr. j. econ. manag. sci. [online]. 2013, vol.16, n.1, pp.13-25. ISSN 2222-3436.
Whistle-blowing can play an important role in enhancing the effectiveness of corporate governance processes. In particular, legislation mandating that auditors blow the whistle on their clients' transgressions can assist in overcoming agency-related costs and improve confidence in external audit. This is, however, only the case if regulatory reform enjoys cohesion. The Companies Act No. 71 of 2008, by introducing a definition of 'reportable irregularities' different from that in the Auditing Profession Act No. 26 of 2005 (APA); excluding 'independent reviews' from the scope of APA; and effectively exempting the majority of South African companies from the requirement either to be audited or reviewed, may materially undermine whistle-blowing by auditors in South Africa. In turn, this begs the question: for how long will South Africa rank first globally for the quality of its auditing practices?
Palabras clave : Auditing Profession Act (2005); Companies Act (2008); Corporate Governance; Whistle-blowing; International Standards on Auditing (ISA); International Standards on Review Engagements (ISRE); International Standards on Assurance Engagements (ISAE).