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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

The solution to student food insecurity is a holistic approach
2017-02-10

Description: Dietetics read more Tags: Dietetics read more

Dr Louise van den Berg from the Department of
Nutrition and Dietetics says the University of the Free State
is taking steps to teach students how to budget and make
them aware how important food nutrition is.
Photo: Pixabay 

Research at the University of the Free State (UFS) has indicated that nearly 60% of students are victims of food insecurity and suffer from hunger most of the time. The research by the UFS Faculty of Health Sciences shows that a further 25% are food insecure but are not hungry most of the time.

Senior Lecturer in the Department of Nutrition and Dietetics, Dr Louise van den Berg, says food insecurity is common among student populations across the world. However, local research shows that it is almost double that of tertiary institutions in developed countries.

Food insecurity among students caught many people off-guard
Dr Van den Berg says in South Africa nobody had really looked at the problem until recently “It seems student food insecurity has caught many people off-guard.” She says people tend to think of tertiary students as a privileged group.

The research has now indicated how deep the problem really is on campus. The students that most likely go hungry are single, male, black or coloured, and are generally first-generation students.

They are also mostly undergraduates, those paying their studies from non-bank loans or bursary means, those not living with their parents or guardians or those that need to support somebody else financially.

The results further indicate that those that are likely to suffer from hunger seldom or never have enough money for food but have to borrow money for food, have to ask for food, sell items to get food or steal food.

“A healthy student is a
successful student.”

Bursary money send back home for parents to survive
Dr Van den Berg agrees that one of the main reasons for the situation is economic stress. Research has shown students rarely spend money on food when resources are scarce. Furthermore, parents of students studying with bursaries are not always able to fully support them on campus. Some students send bursary money back home for their parents to survive.

She says other factors that contribute to campus food insecurity are that all over the world universities have terminated catered food halls due to high costs. “To a large extent this has created a food desert for students and now they need to look after themselves.”

To throw money at the problem does not seem to be the answer. 

Students are food-uncertain beings
The research indicates that young people on campus do not know where to buy food, much less the correct, nutritional food they need. Dr Van den Berg says most universities are now aware of the problem and have been taking steps. This includes teaching students how to budget and making them aware how important nutrition is for their success and their responsibility for themselves.

Universities are also looking at private funding for food aid and food schemes. Dr Van den Berg says other solutions are the restructuring of bursary fees, student self-help initiatives and food gardens.

The Faculty of Health Sciences is taking the initiative to manage a food blog on the UFS website. It will also use other social media platforms to post food-preparation videos and recipes for students.

Dr Van den Berg says it is important to grow the 15.6% group of students who indicated they are food secure because a healthy student is a successful student.

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