SA Express Airways

I am of the professional opinion that the charges do not have any substance and more often than not have no meaning in the sense that the charges contain allegations that are replete with statements that are not contemplated by a professional standard of any kind that a registered auditor is legally obliged to comply with. In addition it appears that Robert Cameron Ellis (RCE) does not have an appreciation or a sufficient working knowledge of the legal and corporate governance framework underpinning such an audit engagement. His report upon which the Independent Regulatory Board for Auditors (IRBA) has based these charges on contains numerous unsubstantiated claims and hearsay evidence. Many of the documents such as audit committee minutes are unverified and are unsigned. RCE makes claims regarding aggressiveness of written documentation which seems to be unprofessional to say the least. RCE makes inferences that seem improbable and provides no evidence to support such inferences. Inferences are acceptable if supported by factual evidence which appears to be in very short supply.

The charges are so vague that no reasonable auditor would be able to understand them. In commenting on the charges I have had to make significant assumptions in order that my arguments appear to be logical and coherent. What is contested are the inferences the IRBA have drawn from the facts giving rises to the charges. For example the inference that the audit conducted was superficial and inadequate. The audit working papers reveal a very well planned and detailed audit. However there may be difficulties with some of the principles applied in arriving at various contentious conclusions.

It is very important to note that in regard to the amended audit opinion for the year ended 31 March 2011 the IRBA has not in any manner or form disagreed with the “disclaimer” of opinion. The IRBA also do not provide a reasonable basis on how this audit engagement should have been conducted. The charges simply contain criticism without any supporting evidence whatsoever that the audit was deficient.

It must be pointed at out that a disclaimer of opinion was issued on the amended financial statements. This supports our view that the adjustments were not rejected as a disclaimer simply means that the auditors were unable to obtain the necessary evidence to support most of the adjustments and there was a distinct possibility with more time and more cost such adjustments may be correct. However there was very little time and no cost (in fact over a million rand was written off). This matter was tested by the Auditor General (AG) when the AG conducted the audit of 2012 financial statements, where there was ample time and obviously cost was not an issue. 

The auditor general with these unlimited resources confirmed our amended 2011 audit opinion of a disclaimer. Therefore there can be no contention that our amended 2011 opinion was incorrect.