s 38H Where compliance by accounting entity with quality control standards is partially satisfactory or not satisfactory
38H.—(1) Where the Oversight Committee, after considering the Registrar’s report submitted under section 38G(2)(a), is satisfied that the accounting entity’s compliance with any of the quality control standards is partially satisfactory under the Oversight Committee’s quality control standards assessment framework, the Oversight Committee may make one or more of the following orders:(a) an order requiring the accounting entity to undergo and satisfactorily complete any remedial programme specified or approved by the Oversight Committee in relation to the accounting entity’s compliance with the quality control standards; (b) an order requiring the accounting entity to take any other steps specified by the Oversight Committee to improve the accounting entity’s compliance with the quality control standards; (c) an order requiring the accounting entity to give any undertaking in relation to its compliance with the quality control standards that the Oversight Committee thinks fit; (d) any other order to improve the accounting entity’s compliance with the quality control standards that the Oversight Committee thinks necessary or expedient. (2) Where the Oversight Committee, after considering the Registrar’s report submitted under section 38G(2)(a), is satisfied that the accounting entity’s compliance with any of the quality control standards is not satisfactory under the Oversight Committee’s quality control standards assessment framework, the Oversight Committee may —(a) make any of the following orders:(i) an order revoking the approval granted to the accounting entity as an accounting entity under Part 4; (ii) an order suspending the accounting entity from providing public accountancy services for a period not exceeding 2 years; (b) in lieu of an order in paragraph (a)(i) or (ii), or in addition to an order in paragraph (a)(ii), make one or more of the following orders:(i) an order restricting the provision of public accountancy services by the accounting entity in the manner that the Oversight Committee thinks fit for a period not exceeding 2 years; (ii) an order imposing on the accounting entity a penalty not exceeding the lower of the following:(A) $250,000; (B) 5% of the accounting entity’s audit turnover during the period of 12 months ending on the last day of its financial year immediately before the start of the quality control standards review; (iii) an order requiring the accounting entity to undergo and satisfactorily complete any remedial programme specified or approved by the Oversight Committee in relation to the accounting entity’s compliance with the quality control standards; (iv) an order requiring the accounting entity to take any other steps specified by the Oversight Committee to improve the accounting entity’s compliance with the quality control standards; (v) an order requiring the accounting entity to give any undertaking in relation to its compliance with the quality control standards that the Oversight Committee thinks fit; (vi) any other order to improve the accounting entity’s compliance with the quality control standards that the Oversight Committee thinks necessary or expedient. (3) Where the Oversight Committee has made an order under subsection (1), the Oversight Committee may, having regard to any change in circumstances or for other good reason —(a) revoke the order and make any one or more different orders under subsection (1); or (b) vary the order and make any one or more different orders under subsection (1) in addition to that order. (4) Where the Oversight Committee has made an order under subsection (2)(b), the Oversight Committee may, having regard to any change in circumstances or for other good reason —(a) revoke the order and make any one or more different orders under subsection (2)(b); or (b) vary the order and make any one or more different orders under subsection (2)(b) in addition to that order. (5) Where the Oversight Committee is satisfied that an accounting entity has breached any order made under subsection (1), the Oversight Committee may make any of the following orders:(a) an order revoking the approval granted to the accounting entity as an accounting entity under Part 4; (b) an order suspending the accounting entity from providing public accountancy services for a period not exceeding 2 years; (c) an order imposing on the accounting entity a penalty not exceeding the lower of the following:(i) $250,000; (ii) 5% of the accounting entity’s audit turnover during the period of 12 months ending on the last day of its financial year immediately before the start of the quality control standards review. (6) Where the Oversight Committee is satisfied that an accounting entity has breached any order made under subsection (2)(b)(i), (iii), (iv), (v) or (vi) (where the order was not made together with an order under subsection (2)(b)(ii)), the Oversight Committee may make any of the following orders:(a) an order revoking the approval granted to the accounting entity as an accounting entity under Part 4; (b) an order suspending the accounting entity from providing public accountancy services for a period not exceeding 2 years; (c) an order imposing on the accounting entity a penalty not exceeding the lower of the following:(i) $250,000; (ii) 5% of the accounting entity’s audit turnover during the period of 12 months ending on the last day of its financial year immediately before the start of the quality control standards review. (7) Where the Oversight Committee is satisfied that an accounting entity has breached any order made under subsection (2)(b)(i), (iii), (iv), (v) or (vi) (where the order was made together with an order under subsection (2)(b)(ii)), the Oversight Committee may make any of the following orders:(a) an order revoking the approval granted to the accounting entity as an accounting entity under Part 4; (b) an order suspending the accounting entity from providing public accountancy services for a period not exceeding 2 years. (8) Where the Oversight Committee makes an order to suspend the accounting entity from providing public accountancy services under subsection (5)(b), (6)(b) or (7)(b), the Oversight Committee may —(a) in the case of an order under subsection (5)(b) — also make one or more of the following orders:(i) an order imposing on the accounting entity a penalty not exceeding the lower of the following:(A) $250,000; (B) 5% of the accounting entity’s audit turnover during the period of 12 months ending on the last day of its financial year immediately before the start of the quality control standards review; (ii) one or more orders under subsection (1); (b) in the case of an order under subsection (6)(b) — also make one or more orders under subsection (2)(b); or (c) in the case of an order under subsection (7)(b) — also make one or more orders under subsection (2)(b)(i), (iii), (iv), (v) or (vi). (9) Any penalty imposed by an order made under this section is recoverable as a debt due to the Authority from the accounting entity. (10) Without affecting subsection (9), where an accounting entity is ordered to pay a penalty under this section but fails to pay the penalty by the date the order takes effect under subsection (13), the Oversight Committee may, if it thinks fit, make an order to —(a) revoke the approval granted to the accounting entity as an accounting entity under Part 4; or (b) suspend the accounting entity from providing public accountancy services for a period not exceeding 12 months. (11) The Registrar must serve a copy of every order made under subsection (1), (2), (3), (4), (5), (6), (7), (8) or (10) on the accounting entity concerned. (12) The Oversight Committee must not make an order under this section to —(a) revoke the approval granted to an accounting entity as an accounting entity under Part 4; (b) suspend an accounting entity from providing public accountancy services (including any order under subsection (8)(a), (b) or (c)); or (c) impose on an accounting entity a penalty, unless the Oversight Committee has given the accounting entity an opportunity to show cause against the proposed order. (13) An order made by the Oversight Committee under this section to —(a) revoke the approval granted to an accounting entity as an accounting entity under Part 4; (b) suspend an accounting entity from providing public accountancy services (including any order under subsection (8)(a), (b) or (c)); or (c) impose on an accounting entity a penalty, does not take effect until the latest of the following: (d) one month after the date the order has been served on the accounting entity; (e) the date specified by the Oversight Committee in the order as the date on which the order takes effect; (f) where an appeal against the order is made to the General Division of the High Court under subsection (14), the date immediately after the date the appeal has been determined or withdrawn. (14) Any accounting entity that is aggrieved by an order of the Oversight Committee under this section to —(a) revoke the approval granted to the accounting entity as an accounting entity under Part 4; (b) suspend the accounting entity from providing public accountancy services (including any order under subsection (8)(a), (b) or (c)); or (c) impose on the accounting entity a penalty, may appeal to the General Division of the High Court within a period of 30 days or within any further period that the General Division of the High Court may allow, after the order of the Oversight Committee has been served on the accounting entity. (15) The decision of the General Division of the High Court on an appeal under subsection (14) is final. (16) In this section, “audit turnover” means the gross revenue derived by an accounting entity from the audit and reporting on financial statements.[Act 32 of 2022 wef 01/07/2023]