Locally and internationally, the auditing profession has come under increased scrutiny mainly because of corporate failures and alleged audit failures negatively impacting economies. Pursuant to these corporate failures, the Minister of Finance, Tito Mboweni, indicated that the National Treasury will appoint an independent panel of experts to review practices in the audit profession, as communicated in the budget speech delivered on 26 February 2020. Globally, most jurisdictions are wrestling with the issue of audit quality and the integrity of capital markets.
While there is an understanding that audit profession needs to change in order to address trust restoration and reputational issues, SAICA’s view is that the overall finance eco-system and capital markets’ stability are called into question by the current situation. The answers to the trust restoration and relevance questions lie in the profession embracing the concept of joint accountability for the stability and trustworthiness of the finance eco-system.
As part of the Audit Reform Project, SAICA is conducting extensive consultations with various stakeholders, including auditing firms, regulators, oversight structures such as the board of directors and audit committees, government, business groups such as Business Leadership South Africa (BLSA) and Business Unity South Africa (BUSA) as well as users of financial statements. In addition to this, a benchmarking exercise is being performed against other reforms that are proposed internationally.
In light of this background, SAICA has embarked on a strategic project on audit reform, which includes a wider finance eco-system improvement agenda. This is an important strategic project that aligns with the SAICA strategic pillar of relevance and reputation. The initiative is coordinated by the Standards division and is being executed through collaboration with various departments within SAICA. The audit reform agenda has been actively promoted through multiple internal and external member structures which has resulted in a significant increase in awareness and allowed for wider and all-inclusive consultation. For example, the South African Auditing Profession Trust Initiative (SAAPTI) structure was actively engaged in order to make sure that the impact of the SAICA and SAAPTI initiatives are aligned and maximised.