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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

Science is diversifying the uses of traditional medicines
2017-07-17

Description: Dr Motlalepula Matsabisa  Tags: traditional medicines, Indigenous Knowledge Systems, Dr Motlalepula Matsabisa, Malaria, priority disease  

Dr Motlalepula Matsabisa.
Photo: Anja Aucamp

According to the World Health Organisation, a large majority of the African population are making use of traditional medicines for health, socio-cultural, and economic purposes. In Africa, up to 80% of the population uses traditional medicines for primary healthcare.

The Indigenous Knowledge Systems (IKS) was identified as a lead programme under the directorship of Dr Motlalepula Matsabisa. Research undertaken by the IKS Lead Programme focuses on some key priority diseases of the country and region – including malaria, HIV, cancer, and diabetes.
 
Not just a plant or tree

Malaria is a priority disease and is prevalent in rural and poor areas, resulting in many traditional health practitioners claiming to treat and cure the disease. There may well be substance to these claims, since as much as 30% of the most effective current prescription medicines are derived from plants.  For instance, chloroquine, artemisinin for malaria, Metformin for diabetes, Vincristine and Vinblastine for cancer, are plant-derived drugs.  

Dr Matsabisa’s current research is investigating a South African medicinal plant that has been shown to have in vitro antiplasmodial activity, with subsequent isolation and characterisation of novel non-symmetrical sesquiterpene lactone compounds offering antimalarial activity. These novel compounds are now patented in South Africa and worldwide. This research is part of the UFS and South Africa’s strive to contribute to the regional and continental malaria problem. The UFS are thus far the only university that has been granted a permit by the Medicines Control Council to undertake research on cannabis and its potential health benefits.

“All of these projects are aimed
at adding value through the scientific
research of medicinal plants, which
can be used for treating illnesses,
diseases, and ailments.”

Recognition well deservedThrough Dr Matsabisa’s research input and contributions to the development of the pharmacology of traditional medicines, he recently became the first recipient of the International Prof Tuhinadrin Sen Award from the International Society of Ethnopharmacology (ISE) and the Society of Ethnopharmacology in India. ISE recognises outstanding contributions by researchers, scientists, and technologists in the area of medicinal plant research and ethnopharmacology internationally.

More recently, Dr Matsabisa undertook research projects funded by the National Research Foundation, as well as the Department of Science and Technology, on cancer, gangrene, and diabetes. He is also involved in a community project to develop indigenous teas with the community. He says, “All of these projects are aimed at adding value through the scientific research of medicinal plants, which can be used for treating illnesses, diseases, and ailments”.

Dr Matsabisa has worked with many local and international scientists on a number of research endeavours. He is grateful to his colleagues from the Department of Pharmacology in the Faculty of Health Sciences, who are dedicated to science research and the research of traditional medicines. The IKS unit also received immense support from the Directorate of Research Development.

 

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