SA chartered accountants back on top of the world

The country’s chartered accounting profession has received a confidence boost after coming top in a global professional trust survey, the South African Institute of Chartered Accountants (Saica) revealed on Wednesday.

The survey, which research firm Edelman conducted on behalf of Chartered Accountants Worldwide (CAW), revealed that South African respondents – within a pool of over 1 300 participants across eight global markets – gave the profession a score of 96% when it comes to trust, a notable improvement from the 85% reported two years ago.

South Africa came ahead of England, Scotland, Wales, Northern Ireland, Ireland, Australia and New Zealand.

According to CAW, the latest survey has revealed that trust in the profession has increased worldwide, with the global score increasing by seven points compared to 2021.

Enhanced credibility

Accountancy body Saica welcomed the news, saying the result bodes well for enhancing the credibility of South Africa’s chartered accountants and attracting new talent to the profession.

“The resilience and excellence shown by our chartered accountants echo the indomitable spirit of South Africa as a nation. They have not only served businesses but have played a pivotal role in sustaining the national economy amidst trying times,” Saica CEO Freeman Nomvalo said in a statement.

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“Much of this success is also due to the hard work of all at Saica, who daily fly the flag for the profession.

“This success also bodes well for the future of the profession in South Africa, and we have worked hard to turn the reputational tide following recent high-profile corporate failures,” Nomvalo added.

Listen: Saica taking steps to restore reputation following accounting scandals

The survey, which focuses on four key aspects of trust – ability, integrity, dependability and purpose – found that 91% of South African businesses regarded chartered accountants as allies in confronting economic adversity,

Further, 79% of South African respondents said their organisations rely on chartered accountants to ensure the integrity of their data. This is compared to 74% of respondents in Wales and 72% in Australia.

Needed boost

The ranking comes as a much-needed morale boost for the country’s accounting profession, which has found itself on the wrong side of the trust spectrum after several scandals surfaced over the years, with the most consequential for South Africa in recent years being state capture.

A couple of years ago, the country witnessed the accounting profession’s fall from grace when it became entangled in various accounting-related scandals involving state-owned companies, which were laid bare at the Zondo Commission of Inquiry into State Capture.

The commission, which ran for more than three years, called into question the profession’s integrity, with the big four auditing firms – Deloitte, EY, KPMG and PwC – alleged to have enabled much of the corruption uncovered at the inquiry.

Read:
Auditors and accountants behaving badly [Jun2018]
State capture chickens come home to roost for accountants [Sept 2018]
How the auditors keep dodging the fraud bullet [Jul 2020]

JSE-listed firms have not been immune to scrutiny. Retail firm Steinhoff in the mid-2010s saw its downfall following the detection of accounting irregularities, which led to the uncovering of what has been dubbed South Africa’s largest accounting scandal.

Last week, Steinhoff confirmed its final delisting from the JSE and liquidation.

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Sugar producer Tongaat Hulett is another JSE-listed firm troubled by accounting fraud. A report by PwC in 2019 found the firm’s executives had overstated profits and certain assets between 2011 and 2018. Tongaat is currently undergoing a business rescue process.

Good for investor confidence

Shahied Daniels, CEO of the South African Institute of Professional Accountants (Saipa) – a sister body to Saica – welcomed the ranking, saying the industry remains fortunate that it is still held in high esteem globally despite the actions of some delinquent actors in the past that may have cast doubt on the profession’s integrity.

“South Africa is very fortunate that these two bodies are highly recognised globally in a number of jurisdictions in terms of what they offer professional accountants,” Daniels told Moneyweb.

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Daniels pointed out that the recognition will also boost the international market’s confidence in South Africa, as the ethical conduct of the profession plays a critical role in whether investors pick the country as an investment destination.

Business Unity South Africa CEO Cas Coovadia shared similar sentiments, adding that the ranking shows that the accounting profession has done the work to address industry shortcomings.

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“It’s going to be good for business because auditors are critical to signing off on the financials and risk performance of businesses – particularly major corporates and others – and unethical practice by auditors would actually call into question what they’ve signed off on,” he told Moneyweb.

“So this has got to be good for business and has got to be good for business governance and corporate governance, so we welcome it,” Coovadia added.

Read:
End of an era: Steinhoff to be dissolved
Recompense for Steinhoff investors looks grim
Tongaat shareholders set to receive nothing for their shares
JSE fines sugar firm Tongaat

Listen to Saica’s CEO speaking to Jimmy Moyaha on SAfm Market Update: