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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 teams up with Department of Agriculture and donates latest farming technology to Oppermans
2009-03-09

 
Attending the recent launch of the latest technology that measures the salinity of soil – the EM38 system – during an information day held in Jacobsdal were, from the left, back: Mr Robert Dlomo, a farmer from Pietermaritzburg in KwaZulu-Natal, Prof. Leon van Rensburg, Department of Soil, Crop and Climate Sciences at the UFS, Mr Sugar Ramakarane, head of the Department of Agriculture in the Free State, Dr Motseki Hlatshwayo, national Department of Agriculture, and Prof. Herman van Schalkwyk, Dean of the Faculty of Natural and Agricultural Sciences at the UFS; front: Mr Robert Smith and Mr Fagan Scheepers from Oppermansgronde, who will be working with the EM38 system in the area.
Photo: Landbouweekblad
UFS teams up with Department of Agriculture and donates latest farming technology to Oppermans

Emerging and commercial farmers of the Oppermans Community in the Northern Cape will now be able to monitor the salinity levels on their farms effectively for the first time.

This is as a result of a donation of the latest technology that measures the salinity of soil – the EM38 system – which the University of the Free State (UFS) is donating to the community.

The unique project was launched by the Department of Soil, Crop and Climate Sciences at the UFS and the Department of Agriculture in the Free State during an information day held at Jacobsdal recently.

The day was attended by members of the Oppermans Community and representatives of the UFS as well as the Department of Agriculture. Mr Sugar Ramakarane, Head of the Department of Agriculture in the Free State, did the welcoming and several academics from the UFS held discussions about various topics related to the salinity levels in soil.

Since the establishment of the Oppermans Community emerging farmers are now for the first time able to accurately monitor the salinity levels on their farms as well as that of irrigation schemes of commercial farms in the area.

“In a region such as the Northern Cape it is very important that the salinity level of soil is monitored properly. As water is administered to crops, salts accumulate in the soil because the roots leave most of the salts in the soil when it transpires. When the salinity of soil increases, the osmotic potential thereof can also increase, which can seriously damage the water intake of crops and can create loss in yield and income,” said Prof. Leon van Rensburg from the Department of Soil, Crop and Climate Sciences at the UFS and leader of the Oppermans Project.

To assist the farming community of Oppermans to apply precision farming and to measure the salinity level of soil more accurately the latest technology that measures salinity in soil – the EM38 – will be donated to the community. Although the system is used throughout the world, the UFS is the only tertiary institution in the country that owns the latest version of this system.

“We are also training two persons from the Oppermans Community as technicians that will monitor the use of the system. The advantage of the donation of the system for the university is that we can gather data that can be used for research purposes by our Master’s and Doctoral students. We also want to see if water-table heights can be measured with this system,” said Prof. Van Rensburg.

According to him the system has several advantages for the community’s emerging farmers. “For the first time the salinity level of soil can now be measured accurately, salt maps can be drawn up, we can advise farmers about the corrections that need to be made and salinity management plans can be compiled,” he said.

The system is very accurate as it takes measurements every 200 mm while it is pulled by a four-wheel motorbike. The readings provide the distribution of salts up to a soil depth of 1 500 mm. “In the past the measuring of salinity levels was time-consuming and the cost thereof was R90 for one sample. The new system is more cost-effective,” stated Prof. Van Rensburg.

The instruments will be handed over to the African Spirit Group of the Oppermans Community, who will then become the owners. The service to farmers will then be managed by an operational group consisting of people from the Oppermans Community, a postgraduate student who can compile salinity maps and Prof. Van Rensburg, who will act as project leader and advisor.

The system will also be made available to farmers at the Riet River and Vaalharts Schemes.

Media Release
Issued by: Lacea Loader
Assistant Director: Media Liaison
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl.stg@ufs.ac.za  
9 March 2009
 

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