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‘SA auditing firms must revamp and emphasise accountability’ – Auditing experts at UFS-hosted panel discussion

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

State of our campuses: UFS closes campuses until Friday 28 October 2016 to readjust academic programme

2016-10-15

UFS announces strategy for completion of the 2016 academic year

Agreement between UFS management and student leadership in relation to residences

After almost four weeks of student protests about fees at the University of the Free State (UFS) and the subsequent suspension of the academic programme and closing of campuses, the senior leadership announced on 14 October 2016 a strategy to ensure that students will be able to complete the 2016 academic year.

The university on 13 October 2016 announced that it will shut down its Bloemfontein and South Campuses until 28 October 2016 for crucial and complex arrangements to be put in place to readjust the academic calendar and ensure that all students can complete their studies. The senior leadership did, however, make it clear that the university will not be shutting down for the remainder of 2016.

No teaching and learning activities at undergraduate and honours level will be offered between 17 October and 28 October 2016. The university will re-start teaching and learning at undergraduate and honours level in the first week of November 2016.

However, teaching and learning will not take place in the classrooms during November 2016, but through a different mode of delivery that consists of a combination of printed and recorded lectures, study materials and learning aids that will be provided by the university and delivered through Blackboard. In this manner no attempts at disrupting the rest of the academic year will affect our students’ academic programme. Students, however, will sit for the exam on campus.

Students in residence accommodation can return to campus as from 29 October 2016 and it is recommended that students who do not have off-campus internet access return to campus in order to access study material to complete the academic year.A new timetable for exams is still being developed and will be communicated as soon as the arrangements have been finalised.

Faculties have been differently affected by the loss of teaching time. Some faculties like the Faculty of Law have completed their curriculum, while other faculties like the Faculty of Natural and Agricultural Sciences require more teaching time. Some faculties, like the Faculty of Health Sciences, cannot do teaching through alternative modes of delivery.

The needs of the different faculties have been taken into account for developing a rescue plan to complete the 2016 academic year.

The Faculty of Health Sciences will continue its classes and clinical rotations as normal for all three schools on the Bloemfontein Campus and in the relevant hospitals. All students registered in programmes in the Faculty of Health Sciences will stay in residences for the full period of their studies and exams. Final-year medical students will graduate in December 2016 as expected.
In the Faculty of Economic and Management Sciences, final-year students for the Certificate in the Theory of Accounting (CTA) will stay on campus during October through to December 2016 and their classes and tests will not change.
Arrangements for all other faculties and programmes are being prepared and within the next week, students and parents/guardians will receive communication about how curriculum content will be completed and when the final exams will take place.
The university is extending the academic year so that we can recuperate all the lost teaching and learning time. The qualifications conferred on the 2016 class will be of the same quality and standards as all UFS qualifications.

The UFS is and will remain a fundamentally contact teaching and learning education university. However, under the current circumstances faced not only by the UFS, but higher-education institutions across the country, the best way of ensuring the integrity of the academic programmes in most faculties is by using an alternative way of teaching and learning. Other South African universities have chosen the same approach to be able to complete the academic year.

Instead of students going to class, they will have content delivered to them where they are (library, computer labs, their own computers, etc.) through Blackboard and printed and electronic material. This is a different way of learning but students will be carefully guided and supported.

Faculties are currently preparing all the necessary materials and instructions to support student learning.Standards and quality will be the same as if students were attending classes. Some faculties require practical laboratory work as part of their curriculum. The exam timetable will be adapted for these students to be able to complete their practical work when the academic activities commences in November 2016. The relevant faculties will communicate the schedule of practical work directly to the students.

Students in their final year will complete their studies during 2016. It is possible that in some cases the graduation ceremony for these students will be in June 2017 instead of April 2017. This will not prejudice students with bursaries, or committed employment in law firms or other businesses. The university will provide the necessary academic transcripts as proof of the completion of the relevant qualifications. None of these changes will affect postgraduate students.

The university will maintain regular communication with students and parents/guardians to update them on the new exams timetable.Faculties will communicate directly with students about issues related to their programmes.

“One of the areas in which significant progress was made, is that we were able to agree on a basis for stability with student leaders. The student protests occurred during an important time in the university’s academic calendar and the readjustment of our academic programme has put tremendous pressure on academic and support services staff, and created anxieties for parents,” said Prof Nicky Morgan, Acting Rector of the UFS.

“The senior leadership restates its commitment to free education as well as its willingness to stand together with students and other public universities to impress on government the urgency to decide on a time frame for the roll-out of free higher education for the poor and missing middle. We will use the next two weeks to meet with the leadership of Universities South Africa to coordinate collective action in this regard. We will furthermore also roll out a series of activities to inform and educate students and the general public on different models and experiences of providing free higher education,” he said.

The strategy to readjust the 2016 academic year is applicable to students on the Bloemfontein and South Campuses.

Released by:
Lacea Loader (Director: Communication and Brand Management)
Telephone: +27 51 401 2584 | +27 83 645 2454
Email: news@ufs.ac.za | loaderl@ufs.ac.za
Fax: +27 51 444 6393

State of our campuses #15: UFS closes campuses until Friday 28 October 2016 to readjust academic programme

State of our campuses #14: All academic activities on UFS campuses remain suspended on 13 and 14 October 2016

State of our campuses #13: Availability of information about plans for remainder of UFS 2016 calendar year

State of our campuses #12: All academic activities at UFS campuses suspended for 11 and 12 October 2016

State of our campuses #11: Academic activities on UFS campuses continue

State of our campuses #10: Impact of non-completion of the 2016 academic year on UFS students

State of our campuses #9: Academic programme on all UFS campuses to resume on Monday 10 October 2016

State of our campuses #8: UFS extends vacation as from 28 September until 7 October 2016, 28 September 2016

State of our campuses #7: All three UFS campuses will be closed today, 27 September 2016.

State of our campuses #6: All UFS campuses reopen on Tuesday 27 September 2016

State of our campuses #5: UFS campuses to remain closed on Monday 26 September 2016

State of our campuses #4: Decisions about the UFS academic calendar

State of our campuses #3: UFS campuses closed until Friday 23 September 2016

State of our campuses #2: UFS Bloemfontein and South Campuses closed on Tuesday 20 September 2016 (19 September 2016)

State of our campuses #1: Academic activities suspended on UFS Bloemfontein Campus (19 September 2016)

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