Uncertainty in the BEE certification process will unsettle many companies

6 Sep 2016

Ujuh Reporter

A great deal of uncertainty hovers over the Broad-Based Black Economic Empowerment (B-BBEE) certification process as the Independent Regulatory Board for Auditors (IRBA) withdraws from the space.

Companies which have over the years enjoyed IRBA powered B-BBEE certificates are in limbo and may face heavy downgrades when they do their next certification under a different standard. IRBA is said to have ran a lighter empowerment certification regime.

IRBA issued a statement saying it will withdraw from the role of regulating B-BBEE Approved Registered auditors (BARs) on the 30th of September 2016. This leaves only the South African National Accreditation System (SANAS) as the only BBBEE certification regulatory body.

B-BBEE Approved Registered auditors who want to continue in the spacer must look to SANAS for accreditation. The challenge is that the guidelines of the two, SANAS and IRBA, can be significantly different in parts. This will affect the BBBEE ratings of companies that were previously measured by an IRBA regulated entity and must now subject themselves to the tougher SANAS regime.

In its statement IRBA notes that it has been accrediting registered auditors offering B-BBEE assurance services since 2011. SANAS has accredited verification agencies, other than registered auditors, since 2007 and will now provide the same for registered auditors.

IRBA CEO, Bernard Agulhas, said “In our engagements with the Department of Trade and Industry (DTI) to finalise our withdrawal from this role, the DTI has indicated it will issue communication to clarify the new regulatory structure and the requirements for compliance as a B-BBEE verification professional in due course. In the interim, the department has also assured us that there is a clear process for auditors who wish to become accredited by SANAS.

“We, therefore, see no reason to extend our involvement beyond the initial withdrawal deadline that was agreed. We are confident that the SANAS process will enable Registered Auditors to register and continue to offer B-BBEE verification services to their clients.

“We have communicated with our stakeholders during the transition period and have issued instructions on the way to proceed, which is available on our website.”

Agulhas adds that “As the objective, scope, work effort and reporting of an engagement performed under SANASs/DTIs verification procedures are significantly different to the requirements of our South African Standard on Assurance Engagements (SASAE) 3502 (Revised), Assurance Engagements on Broad-Based Black Economic Empowerment (B-BBEE) Verification Certificates, we are encouraging BARs to commence their registration now.

“While it makes no sense for two regulators to operate two different processes of accrediting verification professionals for B-BBEE assurance engagements when the requirements and scope are quite different, we do not stand in the way of BARs who wish to continue offering this service and we therefore urge them to undertake the necessary training to be able to meet the SANAS requirements.”

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