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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

Linguistic resourcefulness impresses at 15th Student Symposium on the Natural Sciences
2015-11-26


UFS students walk away with more than half the prizes at this year’s Student Symposium on the Natural Sciences.

This year, the fifteenth annual Student Symposium on the Natural Sciences was hosted on the Bloemfontein Campus by the UFS Departments of Chemistry and Physics, together with the South African Academy for Science and Arts (SAAWK).

According to Dr Ernie Langner, Senior Lecturer in the Department of Chemistry, this symposium provides postgraduate students from all over South Africa the opportunity to present their research in Afrikaans, to learn from each other, receive feedback on their work through the review process, and to build networks. If their abstracts are selected for publication in the Suid-Afrikaanse Tydskrif vir Natuurwetenskap en Tegnologie, it also provides them with further exposure in the broader academic context.

Besides research of the highest quality, this year's symposium had no shortage of linguistic resourcefulness. “Students, accustomed to writing and expressing their research in English, astonished everybody with their beautiful Afrikaans. Outstanding research from honours, master's, and doctoral students was expressed in scientific terminology of the highest standard,” Dr Langner said.

The Student Symposium is the only event (worldwide) where the development of 'elektrostatiese potensiaalkaarte', 'femtosekonde pomp-proef spektroskopie', or 'endokrien-ontwrigtende chemikalieë' is explained step by step. This is where one hears enthusiastic students talking about how hard they are working on 'geïntegreerde drywende sonkragstelsels', or 'geneste virtuele rekenaars binne die wolkstelsel'. The results of hours of hard work in the lab, cold nights behind a telescope, or long midnight sessions in front of the computer, had to be condensed into 15-minute presentations on the synthesis of metal-organic networks, or metal-carbene complexes, the identification of pulsar rhythms, or the refining of rapid-eye technology.

Of approximately forty participants from five universities, eighteen were awarded prizes for their papers and posters. Students from the UFS walked away with more than half of the awards. Jacques Maritz (Physics) and his wife, Elizabeth, (Mathematics and Applied Mathematics) from the UFS were both awarded first place in their respective sessions.

 

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