CREDIBILITY CRISIS
KHAYA SITHOLE: Audit committees are an important pillar and must be accountable
This week — almost 30 years since the first Basel Accords were published in July 1988 — South African Post Office CEO Mark Barnes wrote a valuable article on the prevailing crisis in the auditing profession. Barnes suggests that since auditors get accused of not picking up corporate scandals perpetuated by management, it is management that should take the fall rather than the auditors. He may be correct, but the triple accountability framework also needs to be tackled. SA’s corporate governance framework is made up of a board of directors, an audit committee and management. As the owners, companies’ shareholders are theoretically responsible for the appointment of auditors. But given how diverse and detached investors tend to be, the appointment is merely a ratification exercise that almost universally accepts the recommendation of the audit committee. The audit committee is an important pillar of the framework. To execute its duties effectively, it needs to be suitably competent to...
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