SA auditing firms struggling with shortage of skills

The auditing profession in SA is battling a shortage of skills, due partly to low maths literacy and emigration, warns the Independent Regulatory Board for Auditors (Irba).

Irba CEO Imre Nagy said during a lecture at the University of Johannesburg that most of the top auditing firms in the country have flagged the attractiveness of the profession as an emerging challenge.       

Nagy said that among the reasons for the industry losing its lustre are high entry requirements to study accounting, high tuition fees, low pay, high work stress and tight deadlines, and negative publicity about the auditing profession.

“The contest for talent in SA is exacerbated by low maths literacy significantly reducing the student pool; and a number of push-and-pull factors such as political and socioeconomic instability that on the one hand pushes emigration, and on the other pulls our highly skilled and in-demand professionals to alleviate global shortages,” he said.

“The pandemic also enabled remote working through the use of technology to communicate and perform audit work from anywhere in the world.”

Irba recently accredited the Association of Chartered Certified Accountants (ACCA) as an additional professional accounting body. The watchdog hopes this step will provide another route to the audit specialisation programme for aspiring registered auditors.

“This widens the pipeline of qualified accountants who can pursue auditing as a career and we believe this will help alleviate the talent shortages that the firms are experiencing,” he said.

Nagy, who was appointed to the role just more than a year ago, said the regulator is undertaking a situational analysis to restore confidence in the role of auditors and the regulator, which includes closer collaboration “without compromising our independence as a regulator”.

He pointed to the demise of Steinhoff and the near collapse of African Bank a decade ago as troubling examples of what harmed the industry’s reputation.

Nagy said Irba aims to issue a discussion paper next year to highlight the top five gaps identified in the ecosystem with recommendations that will address these gaps.

He also weighed in on the Supreme Court of Appeal recently overturning the Mandatory Audit Firm Rotation Rule (MAFR) rule, saying: “Irba still believes that rotating audit firms further strengthens the independence of both auditors and firms.

“While the MAFR rule has been set aside recently by the SCA, the independence provisions outlined in the IRBA Code of Professional Conduct for Registered Auditors (Revised April 2023) are still in effect. We will continue to collaborate with National Treasury to reinforce the independence aspects related to firm rotation in our legislation.”