09 Jul 2024

MGI Worldwide's South Africa members discuss industry trends in latest edition of IAB

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MGI Worldwide members continue to step up as global thought leaders, joining industry discussions with peers from around the world. In the latest edition of the International Accounting Bulletin Abraham Petersen, managing partner of MGI Bass Gordon in Cape Town, and Tshegofatso Mahuma, CEO of MGI RAS in Pretoria, take time out to discuss current economic trends in South Africa.

South Africa, known for its challenging business climate, is navigating a new era with its first coalition government and the business community is keen to see how this collaboration will impact economic policy. For local accountancy firms, globalisation is driving growth in offshoring and merger activities, though staff shortages persist. The Independent Regulatory Board for Auditors (IRBA) has increased fines for misconduct, aiming to enhance audit quality, though this has been met with mixed reactions.

Challenges in regulatory processes

In the wake of recent accountancy scandals, the IRBA vowed to crack down on any South African auditors guilty of misconduct and make sanctions really hurt. However, Abraham highlights the inefficiency of the IRBA’s disciplinary processes, stating:

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“The regulator still faces the challenging task of effectively, efficiently, and speedily administering the disciplinary and inspection processes required when dealing with corporate failures.”

This sentiment underscores the ongoing struggle within the auditing profession against stringent regulatory measures.

Balancing demand and fee pressure

Tshegofatso notes the dual challenges of high demand and fee pressure in the accounting sector. 

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“Customer demand remains robust, particularly for advisory and compliance services, driven by the complex economic environment and regulatory changes. However, fee pressure is intense, with clients increasingly seeking greater value for money, leading to downward pressure on service fees.”

Tshegofatso also points out the high staff turnover and scarcity of skilled professionals, suggesting that firms invest in professional development and competitive compensation to mitigate these issues.

Anticipation of coalition government's impact

The coalition government's potential impact on economic policy remains uncertain. Political analysts believe the ANC-DA pact aims to boost the economy by focusing on credit ratings and foreign direct investment. The business community awaits the outcome of coalition talks to determine whether the new government will adopt a pro-populism or pro-business stance, crucial for addressing structural economic issues and fostering growth.

To read the full article in the June edition of the IAB, members can click here (login to the MGI Worldwide member portal will be required).

Click the links for more information about our contributing member firms, MGI Bass Gordon, and MGI RAS


MGI Worldwide is a top 20 ranked global accounting network and association with over 8,000 professionals, accountants and tax experts in some 400 locations in almost 100 countries around the world.