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Abraham Petersen, from MGI Worldwide member firm MGI Bass Gordon, shares insights on corporate and audit failure in South Africa

4th February 2022

MGI World Lead image for South Africa country insight

In the latest Country Insight, Abraham Petersen, from Cape Town-based MGI Bass Gordon, shares insights on current trends in the South African accounting market, including thoughts on the effects of corporate and audit failure and what the Independent Regulatory Board for Auditors is doing to tackle it.

Q: Is there a sense that South Africa is making progress on tackling corporate and audit failure?

Abraham: It seems that the will exists currently to tackle these failures from both a political and administrative aspect however in this space, the wheels of justice appear to be turning extremely slowly indeed. So, while the country and its citizens are upbeat about numerous court cases, investigations and commissions underway, the longer these take to reach finality, the lower the potential impact of the findings will seem. Further-more a growing concern is whether the sanctions raised will indeed be enough of a deterrent to assist with preventing future corporate and audit failures.

Q: The Independent Regulatory Board for Auditors has said that its focus going forward will be on audit quality, sustainability and relevance of the regulator and the profession - is there confidence that the IRBA can achieve these objectives?

Abraham: I believe that the IRBA is perfectly positioned to drive the focus on audit quality, sustainability and the relevance of both the regulator and the profession however its core focus should be on the areas that affect the public interest. Simply by their nature, when there is a corporate or audit failure in the public interest realm, it has far-reaching implications.

The IRBA should have as its primary focus the critical task of restoring investor and the general public confidence in the audit process specifically around public interest entities and state-owned enterprises. Of course, before the IRBA can focus on restoring confidence in the audit process, it must first restore confidence in its own internal governance processes and structures.

Q: What are your expectations for the next 12 months - are there any potentially significant developments in the pipeline?

Abraham: The year ahead will be a challenging one from many perspectives particularly as the South African economy is still fighting to recover from the effects of the Covid 19 pandemic and the resultant lockdowns and restrictions. The accounting and auditing profession specifically will need to embrace technology fully with greater investment in cloud-based solutions, focus on widening their array of service offerings as well as placing renewed emphasis on corporate culture and value systems. These together with other strategic interventions will ensure that firms retain the competitive edge as both trusted advisors and employers of choice.

Click HERE to view the full Country Insight


About MGI Bass Gordon

MGI Bass Gordon's mission is to be a values-driven organisation offering a comprehensive range of compliance and advisory services - putting clients first, always. Its philosophy is to invest in long-term, value-driven relationships focused on helping clients progress and prosper.

For more information contact Abraham Petersen at abe.petersen@bassgordon.co.za or visit the firm profile page and website.

MGI Worldwide with CPAAI, is a top 20 ranked global accounting network and association with almost 9,000 professionals, accountants and tax experts in some 410 locations in over 100 countries around the world. 

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