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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

Professor launches his book, opposition parties attend
2011-03-22

Prof. Hussein Solomon
Photo: Stephen Collett

“We are good in opposing people, but we’re less good in opposing ideas.” This was how Prof. Jonathan Jansen, Vice-Chancellor and Rector of the University of the Free State (UFS) introduced the book launch of Against all Odds: Opposition Politics in Southern Africa.

The event was hosted in collaboration with the publisher under the title: Are opposition parties in South Africa in a crisis? This formed part of a series of dialogue sessions, organised by the Centre for Africa Studies, in the run up to the local elections.
 
Amongst those interested who attended the evening in the Senate Hall of the CR Swart Building on the Main Campus were various politicians, students, staff en a panel consisting of academics and the respective provincial representatives of the ANC and DA.
 
Dr Mcebisi Ndletyana from the Human Sciences Research Council (HSRC), acted as arbiter.
 
Proff. Hussein Solomon, author of Against all Odds: Opposition Politics in Southern Africa, also lecturer at the UFS, as well as Dirk Kotzé, Head of the Department of Political Science at Unisa, delivered enriching lectures on the stance and positioning of opposition parties.
 
Prof. Hussein, who spoke first, circumscribed the context of the political climate in the country, based on his book. “The problem that political science encounters is that everybody becomes experts on the internet, while they have no experience of what is happening in South Africa.” He said that when political parties in the country are under discussion, voters often allow myths and/or stereotyping to influence their concept of it. ‘’If there are no opposition parties, there is no democracy and people are deprived of their vote.”
 
Prof. Kotzé stated in his speech that it was not only opposition parties who had to make the government watch its step, but also the status that the country acquired, amongst others, from its connections, i.e. collaborative agreements such as BRICSA and the country’s inclusion in the G20. He left the audience with a question about how they were going to become involved in politics, and with his rhetoric question referred to options like social networks and movements.
 
Mr Sibongile Besani, the ANC'S secretary in the Free State, said the DA grew due to it’s swallowing of other parties; something he claims is taking the country backwards. He also described the use of personalities by opposition parties as means of association a weakness. He added that voters will continue voting for the ANC because they can associate themselves with the party’s vision.
 
In contrast, Mr Roy Jankielsohn, provincial leader of the DA, said voters and parties unite under their core vision for the country as like in the case of the ANC during the liberation struggles.
 
During the question-and-answer session, which followed after Mr Jankielson’s speech, Prof. Kwandiwe Kondlo, upon completion and summary of the discussions, stated firmly that the opposition parties are in a crisis. “The start of the solution is to recognise the problem. That is why our democracy finds itself in the state in which it is; because the opposition does not fulfil the role that they are supposed to fulfil.“ Prof. Kondlo is the head of the Centre of Africa Studies at the UFS.
 
He concluded by stating that the economic basis in the country was not transformed. “We cannot say that people determine their futures if they posses nothing. Opposition parties must start to communicate at this level in order to table something new. Our democracy must become more inclusive at political and material level.”

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