Deloitte has defended its auditing work on African Bank, saying there was nothing wrong in the way the rescued lender calculated how much it needed to put aside to cover potential customer defaults. A Business Day report notes African Bank nearly collapsed under a mountain of unpaid consumer loans in 2014, prompting the Reserve Bank to come up with a bailout package and place it under curatorship. The Independent Regulatory Board for Auditors (Irba) has called in Deloitte to answer to 10 charges levelled against employees who signed off African Bank’s financial statements prior to its failure. Irba has charged that African Bank’s required impairment provision was understated by R3.7bn in the 2013 financial year. But Deloitte’s lawyer, Michael van der Nest, subsequently defended the firm’s audit partners’ decision to give African Bank a clean audit, saying there was nothing wrong in its decision to book charges on loans that had missed more than three payments. The regulator argued that international auditing standards require banks to make this provision as soon as the customer misses their first full payment. ‘In practice no one does what you suggest,’ said Van der Nest to Irba’s investigator, Robert Cameron-Ellis. He said banks did not calculate how much they needed to set aside for loans that have missed fewer than three payments.