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01 August 2023 | Story Kekeletso Takang | Photo Supplied
Business Acumen Day 2023
The UFS School of Accountancy hosted a panel discussion in the Centenary Complex with the topic ‘The audit profession’s response to the financial reporting scandals of the past decade: Has enough been done?’. Panellists included Prof Bernard Agulhas, Rob Rose, and Patricia Stock, and the session was facilitated by Prof Philippe Burger and Conrad de Wee.


Auditing firms in South Africa should go back to basics and emphasise accountability in revamped corporate structures to avoid repeats of the big auditing scandals of the past decade such as the Steinhoff, VBS, Tongaat Hulett, and Bosasa scandals. This was some of the opinion expressed during a panel discussion hosted by the University of the Free State (UFS) School of Accountancy and featuring auditing and accountancy experts. 

The discussion tackled the topic ‘The audit profession’s response to the financial reporting scandals of the past decade: Has enough been done?’, and featured a panel of experts including Rob Rose, Financial Mail Editor and author of Steinheist; Prof Bernard Agulhas, former CEO of the Independent Regulatory Board for Auditors (IRBA) and current Adjunct Professor of Auditing at the UFS; and Patricia Stock, audit partner and CEO of MGI RAS and former South African Institute of Chartered Accountants (SAICA) board member. 

The event took place on 19 July 2023 in the Centenary Complex on the UFS Bloemfontein Campus. It was facilitated by Prof Philippe Burger, Dean of the Faculty of Economic and Management Sciences, and Conrad de Wee, Chairman of the SAICA Central Region Council and Senior Manager at auditing firm Mazars.

Prof Agulhas said a lot has been done to prevent a repeat of the root causes of the financial reporting scandals of the past decade. “Everyone has responded. The profession, regulators, universities, labour markets, the public, and professional bodies.” Still, he said a lot more needs to be done. “We have to go back to basics. Look at the framework, ISA standards, skills, and competencies. Professionals must be adaptable and responsive. Firms must set the tone at the top and create a conducive environment. Establish a culture of accountability. We have to go back to behavioural competencies. Universities can also investigate the inclusion of forensic auditing as part of the curriculum.” 

The panel felt that accountability is central to going back to basics. Rose said he believes businesses need to change their organisational cultures. “The likes of Glencore and Tiger Brands are making an immense effort to revamp. There are numerous ways companies can go about it, including setting the tone at the top and establishing accountability structures in-house. Also, not only having fraud-detection systems, but also implementing them.”

He also questioned why no one is holding bankers accountable for failing to uncover recent corporate scandals. “In the case of Tongaat Hulett, how did they miss all the issues through their risk assessment? At the end of the day, they should also be held accountable.”

Where it all went south

Prof Burger said the World Economic Forum had for seven years, until 2017, rated South Africa number one for the strength of auditing and reporting standards. “And then we started to see things go wrong, with the likes of state capture, Steinhoff, VBS, and others. In light of this, has enough been done to equip external auditors to deal with fraud in organisations, and to ensure that they act in the interest of the public?” 

Prof Agulhas, speaking from his experience as a regulator, said, “Initially, South Africa was one of the few developing countries to adopt international standards. For seven years, we have received a good rating from the World Economic Forum. But if we can be honest, while our professional qualifications are among the best in the world, we were not that good at implementing these standards due to behavioural issues on the part of certain accountancy/ auditing professionals.” 

Stock, sharing her perspective as an audit practitioner, commented: “We are noticing a growing trend among firms to improve on reporting, and audit committees are holding professionals accountable. While this is said, we should also acknowledge that there is a need to look at the whole ecosystem relating to financial reporting.”

Auditing in the era of artificial intelligence

When questioned about the impact of technological advances on auditors, Stock said she believes artificial intelligence and technology integration offer the auditing profession a wonderful opportunity. She stressed that technology will not replace human capital. “We need critical thinkers and value creators. Technology won’t replace that, especially where Environmental, Social, and Corporate Governance (ESG) is concerned.” 

Interaction between universities and industry

Prof Burger posed the question, “When looking at the interaction between universities, industry, and trainees, would you say this model is still fit for purpose, and are these individuals ready?”

Stock responded, “The profession needs the diversity of minds. We need their enquiring minds. We need to hear the voices of our trainees. In fact, one of the scandals of the past decade was picked up by a trainee, but was unfortunately ignored by the more senior staff.” 

Where we are now

The panel discussion was attended by stakeholders from the School of Accountancy, which included managers and directors of various auditing and accounting firms, representatives of professional bodies, members of management from large businesses, and university staff members. Interactive polls and the opportunity to submit questions allowed guests to participate in the discussion, which ended with a consensus that while much effort has been made to restore the credibility of the auditing profession, there is still further work to be done. 

The panel discussion was made possible with the financial support of Standard Bank.

News Archive

UFS cardiac team leading with project
2017-05-31

 Description: Cardiac team read more Tags: Cardiac team read more

Prof Peter Schultheiss of the Charité University in Berlin,
Germany, visited the Robert WM Frater Centre for
Cardiovascular Research at the UFS for a study regarding
cardiomyopathy, a significant cause of fatal heart failure
among Africans. From the left are Dr Glen Taylor,
Dr Danie Buys, Prof Makoali Makatoko,
Prof Schultheiss and Prof Francis Smit.
Photo: Rulanzen Martin

A team of cardiac doctors associated with the Robert WM Frater Cardiovascular Research Centre at the University of the Free State’s (UFS) Faculty of Health Sciences has commenced with a pioneering research project regarding idiopathic dilating cardiomyopathy.  

An Afrocentric research focus
Prof Francis Smit, Head of the Department of Cardiothoracic Surgery at the UFS and Head of the Frater Centre, describes dilating cardiomyopathy as a heart muscle disease that is quite common, particularly among people of African descent. The disease weakens the heart muscle, which in turn leads to heart failure.

“To date there is no curable treatment for this condition and 50% of patients that have shown heart failure, died within a period of five years. The causes of this condition have been unknown in the majority of patients. But over the past few years major strides have been made where virus infections of the heart muscle or myocarditis have been identified as a possible underlying cause. Various genetic diseases are also linked to it,” says Prof Smit.

International collaborations ensure success
According to Prof Smit, the project is being run in conjunction with Prof Heinz-Peter Schultheiss of the Charité University and the Institute for Cardiac Diagnostics and Therapy in Berlin, Germany.

“We have been working on the project over the past 18 months and I have twice visited Prof Schultheiss in Germany. He is now visiting us in Bloemfontein. We have established a collaborative project focused on patients in central South Africa”.
Prof Schultheiss is a world leader regarding the diagnosis, pathology and treatment of dilating cardiomyopathy, says Prof Smit.

“He brings a lifetime of research experience to Bloemfontein and is internationally renowned as the father of myocardial or heart muscle biopsies.

“His pioneering work on the discipline has led to diagnostic accuracy that has induced purposeful and personalised treatment of dilating cardiomyopathy and has brought about dramatic changes in some subsets of patients’ life expectancy and their cure.”

Solving problems close to home
According to Prof Mokoali Makatoko, Head of the Department of Cardiology, there are more than 1500 new cases of heart failure identified annually at the Universitas Academic Hospital, of which approximately 30% are attributed to cardiomyopathy. “With the use of endomyocardial biopsies the team hopes to treat viruses unique to Southern Africa as well as other underlying causes of dilating cardiomyopathy.”

Prof Stephen Brown, Head of Paediatric Cardiology at the Universitas Academic Hospital, says children suffering from this disease never reach a mature age and those under his supervision will also be undergoing these tests. Various other departments at the UFS will also participate in this project. Profs Makatoko and Brown did the first four endomyocardial biopsies under the management of Prof Schultheiss during the past week. The results will be available in the coming weeks after which the project will be officially launched and patient recruitment will start in earnest.

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