Sandisiwe Shoba | Daily Maverick | 2 July 2020 |
Lack of independence, poor accountability and a culture of silence are some of the issues plaguing the auditing profession globally. A new report by non-profit, Open Secrets, shows how cracks in the system have caused a credibility crisis in the industry and why this is a matter of public interest.
“As the world stumbles from one crisis to the next, its economy precarious and its core financial markets inadequately reformed, it won’t be the accountants who pay the price of their failure to hold capitalism to account. It will once again be the millions who lose their jobs and their livelihoods.”
This quote is written in bold print on one of the opening pages of Open Secret’s latest investigative report: “The Corporations and Economic Crime Report (Volume 2): The Auditors’.
Financial Mail Lounge, in partnership with Open Secrets, hosted a webinar facilitated by Financial Mail editor Rob Rose to unpack some of the insights from the investigation and to delve into the pitfalls of an industry seemingly in crisis.
On the panel were Mamello Mosiana and Michael Merchant, the co-researchers for the project, independent analyst and accounting lecturer Khaya Sithole and outgoing CEO of the Independent Regulatory Board of Auditors (Irba), Bernard Agulhas.
Mosiana gave an overview of the report which explores the origins of the accounting profession, the concentration of power among the big four firms — KPMG, Deloitte, Ernst & Young (EY) and PricewaterhouseCoopers (PwC), local scandals in the public and private sector such as Steinhoff and VBS and ultimately that malfeasance and poor accountability has given rise to a global crisis of credibility in the auditing industry.
“This is a public interest issue which harms citizens fundamentally. Whether it’s a corporation that is defrauding shareholders… or it’s a bank where money is stolen directly from depositors,” said Merchant.
