East Rand Member District of Chartered Accountants and Another v Independent Regulatory Board for Auditors and Others

The first appellant is a voluntary association of chartered accountants, some of whom are registered auditors regulated by the Independent Regulatory Board for Auditors (IRBA), a statutory body established under the Auditing Professions Act 26 of 2005. In 2017 the IRBA promulgated the Mandatory Audit Firm Rotation Rule (MAFR), which limited audit firms to a maximum of ten consecutive years auditing a public interest entity, followed by a five‑year cooling‑off period. The rule was intended to enhance auditor independence and audit quality and was to take effect on 1 April 2023. After requesting and receiving reasons under PAJA, the appellants instituted review proceedings to set aside the MAFR, contending that the IRBA lacked statutory authority to promulgate it. The High Court dismissed the review on the basis of unreasonable delay. The appellants sought leave to appeal to the Supreme Court of Appeal.

Leave to appeal was granted and the appeal was upheld with costs. The High Court’s order was set aside and substituted with an order reviewing and setting aside the Mandatory Audit Firm Rotation Rule promulgated on 5 June 2017. Costs were awarded, subject to a limitation that only 50% of record preparation costs could be recovered.

The case is significant for clarifying the limits of statutory regulators’ rule‑making powers in South African administrative law. It affirms that regulatory bodies may not impose substantive policy choices affecting rights and commercial freedom unless clearly authorised by their empowering statutes. The judgment also reinforces principles on ripeness and delay under PAJA, particularly in relation to quasi‑legislative action.