Who broke auditing and can it be fixed?
A string of high-profile accounting-related disasters has hit SA investors in quick succession – Steinhoff, EOH, Tongaat, VBS, Resilient. They come in the wake of accounting crises and corruption across the public sector. Has the auditing profession lost its way, becoming embedded with clients and failing to provide clean financial statements that justify its huge fees? What’s behind the crisis – and can it be fixed?
For Steinhoff investors, who have lost large chunks of their wealth, the 20 months since its collapse have created the galling spectre of a "heads I win, tails you lose" audit industry.
During the 2018 financial year, the furniture retailer was forced to cough up R2.4bn for forensic and ordinary auditors, as well as advisers who were cleaning up after a decade or more of rogue accounting by senior executives inside and outside the business.