PRESENTATION TO STANDING COMMITTEE ON AUDITOR GENERAL 6 NOVEMBER 2009

1. PRESENTATION TO STANDING COMMITTEE ON AUDITOR GENERAL6 NOVEMBER 2009

3. SAICA Profile • Professional Body for Chartered Accountancy Profession in South Africa • Membership of 29 000 • Regional representation • International presence • The Chartered Accountancy Profession’s Broad-Based Black Economic Empowerment (B-BBEE) Charter

4. Public Sector & Africa • Value proposition • To actively influence financial reporting & auditing in the public sector in South Africa • By: • Collaborating with key public sector entities such as NT, AGSA, ASB; and • Leading public sector initiatives to address challenges

5. COMMITTEES/FORUMS • Public Sector Committee (PSC) • Includes representatives from AGSA, NT and ASB • National, Eastern and Southern Region • Public Sector Technical Forum (PSTF) • Sub-committee of PSC • Limit of 25 members • Accounting, auditing and legislation impacting accounting & auditing • Public Sector Audit Committee Forum (PSACF) • In development phase • Joint initiative with IoD, IIASA, IRMSA, AGSA, NT and DCOGTA • Aims • IRBA/AGSA Audit Technical Forum • New IRBA committee that SAICA participates in • Auditing issues • ECSAFA • Regional accounting body

6. FOCUS AREAS WITHIN THE PUBLIC SECTOR Standard setting • Participate in ASB activities • Participate in IPSASB activities Legislation • Commentary on legislation such as PFMA and MFMA Contributions • Department of Local Government • AAT program • Thuthuka

7. SAICA MEMBERS RELATIONSHIP WITH AGSA SAICA Training Offices 900 trainees with the AG Biggest Public sector training office Technical cooperation with AG on audit standards and methodology Participate in AGSA requests for comments to exposure drafts Participant and signatory to the Broad Based Black Economic Empowerment CA Profession Charter Participation in the Thuthuka program Contract work relationship

8. Contract Work Relationship • Traditionally 25-30% of AG work is contracted to SAICA members • Members and firms do contract work on behalf of AGSA • Members subcontract staff to the AGSA • Members perform Pre-issuance Quality Control reviews • Members assist in special investigations • Members independently perform audits on Schedule 2 public entities

9. Contract Work Relationship • Help supplement capacity • Greatly assist in meeting PFMA and MFMA deadlines • Provide expertise in complex audit environments • Facilitate skills transfer

10. Contract Work Relationship • Maintenance of 25-30% contract work allocation • Tendering process • Compliance with the CA Profession B-BBEE Charter • Timing of the process • Duration and consistency of allocations • Transparency • AGSA Rates • Higher than AGSA internal rates; but • 30-40% lower than commercial rates • Recognition of different cost drivers in the rates negotiations

11. CONCLUSION Committed to working closely with AGSA and NT in the interest of the country as a whole Value our long term relationship with the AGSA and would like to continue the relationship on a mutually beneficial basis Continue to adopt a leadership position in public sector financial reporting and auditing by communication and training interventions Appreciate the opportunity to interact with SCOAG Always willing to provide input on any matter SCOAG requires

12. QUESTIONS?