JOHANNESBURG - The Independent Regulatory Board for Auditors (IRBA) of South Africa has called on regulators and institutes across the sub-Saharan region to employ consolidated efforts to restore the reputation of the auditing profession.
The IRBA is investigating the conduct of audit firm, KPMG, in relation to its audits of Linkway Trading, a company owned by the controversial Gupta family which allegedly swindled the Free State government out of R200 million, and the report into an alleged "rogue unit" at the South African Revenue Service (Sars).
IRBA chief executive, Bernard Agulhas, said the recent scandals involving accountants and auditors have negatively impacted the perception of what has until now been a trusted profession and current woes are pointing to a corrupted system that is failing in the protection of the public.
Agulhas said that audit and accountancy practices have to walk a tight rope between profitability and professionalism.
He said the impact on investors and the public has been significant, and for countries that are seeking foreign direct investment, a recommitment to sound corporate ethics is absolutely essential.
"Part of the problem may well be that in the pursuit of commercialism the risk of compromising professional and ethical principles has increased. Too much attention on the bottom line and weak corporate ethics have left audit firms faced with bad press, loss of faith in the profession, destroyed reputations and public images, and disempowered stakeholders," Agulhas said.
"Part of the solution lies with regulators. We must insist on higher ethical and behavioural standards. There is too little pride for the observance of ethical standards to leave the job of restoring the public trust to the firms. Regulators must push for more transparency, and ensure that conflicting interests, independence and the dangers of unconscious bias are addressed. It is not only about technical competency and improvement - we must insist on changes in auditor behaviour."
Agulhas addressed delegates at the annual Zimbabwe Accountants Conference (ZAC2018) hosted by the Public Accountants and Auditors Board of Zimbabwe in Harare late Thursday.
He also shared detail on some of the initiatives which the IRBA intends to roll-out in South Africa aimed at improving transparency, audit quality and independence, as well as projects to revisit the competency requirements for auditors.