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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

Official opening ceremony of the UFS Qwaqwa Campus
2006-02-15

Official opening ceremony of the UFS Qwaqwa Campus
11th February 2006 – Multipurpose Hall

Opening Speech:
Prof. Peter A. Mbati
Campus Principal

Successfully rising to the challenges of incorporations and mergers – developing a vibrant and academically stimulating satellite campus of the University of the Free State.

Thank you Mr. Program Director and good morning ladies and gentlemen.

I wish to once again welcome all of you to the official opening ceremony of the University of the Free State QQ campus.  Thank you for taking time to share with us an important date in our campus academic calendar.  I bring you greetings from our Rector and Vice Chancellor Prof. Frederick Fourie.

During such occasions we try and reflect on important matters that have affected us as an institution in the preceding year, commit ourselves to specific objectives for the current year, while planning for the proceeding year.

Today I shall be talking on Successfully rising to the challenges of incorporations and mergers – developing a vibrant and academically stimulating satellite campus of the University of the Free State’.

SRC inauguration
I would like to congratulate the SRC President and the entire SRC leadership for being elected into important positions of student leadership and authority. 

As a university we are proud of the quality of our student leadership on the Qwaqwa campus.  I am confident that you young leaders will rise to the challenges of your office and discharge your duties with diligence and without fear or favour.  That you will rise above your party affiliations and provide effective leadership to the entire student body on campus.
                              
Leadership is complex and requires you to be objective, just and fair in your approach to the many challenges that you will encounter.  You will be judged not by the populist decision that you take when confronted with difficult choices, but rather, on the wisdom that you exercise in reaching consensus in decision making processes.

The era when management and student leadership viewed each other with suspicion and as adversaries is long gone.  Management, academic and administrative staff, parents and students must have common agendas in as far the  quality growth and development of our university is concerned and to strive towards academic excellence.  I leave the challenge to you students, and more so to the inaugurated student leaders to define your agenda in achieving this noble objective.  I trust that you will make the right choices.

Brief history of incorporation
On the recommendations of the National Working Group of Higher Education, the Qwaqwa Campus of the then University of the North was incorporated into the University of the Free State on 1st January 2003.  We suddenly had to move from a campus that was originally semi-autonomous and with its own culture developed over almost 20 years, into a campus that had to operate as a fully integrated campus of the UFS, a 100 year old institution with its distinct culture.

Following incorporation, we not only had to continue with our core business of teaching, learning, research and community service, but we also had to engage in other important aspects such as exploring the most appropriate models of governance for the campus, encouraging dialogue and interactions at all levels between personnel at the different campuses with a view to developing trust between colleagues. And with the added dimensions such as participation in the transformation task team we in effect are at the fore front of developing a new institutional culture at the UFS and a truly South African University.

UFS Strategic objectives
The strategic and transformation priorities of the University of the Free State for 2006 – 2008 as approved by the Executive Management at its retreat in January 2006 are:

  • Quality and Excellence
  • Equity, diversity and redress
  • Financial sustainability
  • Regional co-operation and engagement

Central to this priority is the integration of the Qwaqwa campus as a valuable constituent part of the UFS, and the strategic reconfiguration of the campus in order that the UFS can play a meaningful role in regional engagement and development.

  • National leadership

The five strategic objectives cannot be viewed in isolation and run simultaneously and in concert with each other. 

The Question must therefore be what we on the QQ campus, staff and students, parents and our broader community are willing to do to achieve these strategic objectives. The reconfiguration and strategic planning of this campus, and therefore its success, must be a collaborative effort between colleagues at QQ and on the main campus.  We must all be ready to work together, to plan together, to shoulder responsibilities together and sometimes, to share the pain and disappointments together. 

The second question must therefore be: are we prepared to go that extra mile for our campus to ensure that we claim our rightful stake within the ranks of well respected academic institutions of higher learning in this country?  At this point in its history this campus requires committed men and women from across the cultural spectrum who appreciate the challenges ahead of us and who are ready to give of their best and to constructively engage at all levels to make this dream a reality.  Because this dream is possible and this dream will be realized!

Quality and Excellence (1st strategic objective)

As mentioned by the Rector in his speech at the official opening ceremony of the university on the main campus on Friday 3rd February, the university will in 2006 pay extra attention to Quality and Excellence.  This is informed by the Higher Education Quality Committee’s (HEQC) institutional audit which is scheduled to take place this year.  Our university as well as several other HEI’s will be subjected to this audit.  This will call for a lot of hard work on your part in preparation for a successful audit and in this regard therefore I request for your cooperation.

As a further step in confirming our commitment to quality and excellence, we have simultaneously introduced on the QQ campus and the main campus workshops on performance management systems to a cohort group.  This will be expanded in 2006 to a wider group of managers on the QQ campus to include among others all Program Heads and Subject Heads. PMS is an invaluable tool for fair, effective and efficient management of a very important resource on campus – the human resource.  Benefits of PMS include among others:

  • Instilling and enriching a culture of performance management (quality assurance) as an integral part of the day to day functioning of staff at the campus
  • Improving staff performance through mentoring, development and training

Tri campus project
One of the more important projects that we as a university undertook in 2005 was the Tri Campus Project which was coordinated by the Free State Higher Education Consortium (FSHEC) through Niel Butcher and Associates consultants.

The Tri-Campus project focused on the strategic planning for higher education campuses in the Free State that have been incorporated with UFS and CUT during the reshaping of the South African higher education landscape. The Bloemfontein Vista campus and the Qwaqwa campus of the University of the North were incorporated with the UFS, and the Welkom Vista campus with the CUT.

The planning process involved a range of research and consultation activities during the course of 2005. This included:

  • Conducting situational analyses of the Qwaqwa campus during which staff and students were widely consulted;
  • Consulting with the campus and with a range of stakeholders in the sub-region
  • Review of the Free State Provincial Growth and Development Strategy and Integrated Development Plans (IDPs) of the regions and other research of relevance to the sub-regions, province and country.

An operational framework for the reconfiguration of the campus with a range of possible Program Qualification Mixes has been produced.  In December 2005, the Rector, the Vice Rector Academic Planning Prof. Magda Fourie and I discussed this document with senior members of the DoE in Pretoria, and we will soon be meeting with the National Minister of Education Me Naledi Pandor for her guidance and to seek support in the further refinement of the document and subsequent implementation.

Recapitalization
This year a further R 6 M has been budgeted for recapitalization.  In about two weeks time the third of phase of renovations on campus will commence and attention will be given to the administration building, the humanities and the outstanding work in the lecture hall complex.  There- after the library, sciences and education buildings will follow.  As you will recall a substantial portion of the R 8.4 million in 2005 was used to upgrade the student residences and the lecture hall complex.

I am certain that the renovations and upgrading of our infrastructure and physical facilities including landscaping will create an enabling environment for you to enjoy your work and studies on this campus.

Renovations come with some measure of inconveniences and I therefore wish to request for your patience and support during this period.

Closing remarks
There is a heightened spirit of optimism on what the future holds for this campus.  This is evident when I talk to a large cross section of staff and students of this campus – and I therefore invite all of you to come and be partners with us on this journey of optimism and hope of what the future holds for the UFS – QQ campus.

Thank you and God bless!

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