Auditor-general Tsakani Maluleke has called on the auditing profession to take a moment and reflect on the role it played in the state capture episode.
Maluleke, in a wide-ranging interview with Sunday World, said the industry has its work cut of for it to close the trust deficit between it and the republic.
“All of us want an accountancy profession that is well regarded and characterised by professionalism and integrity. We must have public trust in the offering of the industry. As long as that trust is compromised, we will not be able to attract capital to our economy and raise funding for public sector projects,” Maluleke said.
“We hope that following the release of the Zondo report [on state capture], the industry will use that as an opportunity to have a dialogue and proper reflection on how best to close the trust deficit that exists between what the profession offers and what the public expects.”
Chief justice Raymond Zondo lambasted the role played by auditors in turning a blind eye to glaring corruption. He took particular issue with PricewaterhouseCoopers (PwC) and its joint audit partner Nkonki when they audited the books of SAA between 2012 and 2016.
The two firms gave SAA unqualified audits for each of the five years they provided external audit services.
“During this period, the board was in a state of precipitous governance decline. It was also engaging in acts of corruption and fraud. None of this was, however,
detected by its auditors. Instead, their audit reports each year conveyed to the public that SAA was complying with the law and that irregular expenditure was under control,” Zondo said.
In 2020, Deloitte agreed to return R150-million in consulting fees to state power utility Eskom to settle a dispute over improperly awarded contracts.
Cosatu’s Matthew Parks said auditors have a duty to ensure good governance in the public and private sectors.
“It has been extensively shown at the many commissions of inquiry into state capture that countless auditors were not only complicit, but in many cases helped to facilitate the industrial looting of state and private sector companies,” he said.
“Workers are now paying the price in the collapse of key SOEs [state-owned enterprises] and municipalities, the disintegration of badly needed public services, and in many cases lost wages and retrenchments. Workers in the private sector have not emerged unscathed as supposedly clean publicly listed companies were fleeced.”
President Cyril Ramaphosa last year signed the Auditing Profession Amendment Act into law. Some of its provisions include the prohibition of practising auditors from serving on the Independent Regulatory Board of Auditors and its
investigating and disciplinary committees to avoid conflicts of interest.
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