Is anybody actually guarding the guards?

The question, “Who will guard the guards themselves?” was first posed by first century Roman satirist and poet Juvenalis.In light of the massive corporate corruption now being exposed, it is a question that needs to be asked and answered once again of our country’s auditing profession.

According to the South African Institute of Chartered Accountants’ (SAICA) web site, one of the functions of their members – chartered accountants – is listed as follows:

“Auditing/assurance: Auditors review company systems, financial statements and accounting principles while checking the accuracy of the company’s financial records. The auditor is responsible for issuing an opinion on whether or not annual financial statements fairly present a company’s results and financial position.”

That statement contains three very clear and specific functions. If auditing firms have been doing their jobs properly, don’t you think there would have been no room for the corruption that has allegedly taken place? But, judging by the alleged corruption that has been recently exposed at Bosasa, in plain South African English: Who are Bosasa’s auditors and what the flipping heck have they been doing for the past decade or more?

Again, in plain English:

1. Did they actually review Bosasa’s company systems, financial statements and accounting principles?
2. Did they actually check the accuracy of the company’s financial records?
3. Did they actually issue an opinion on whether or not the annual financial statements fairly represent Bosasa’s results and financial position?

Whoever they are, they need to be held to account along with Bosasa – and all the other auditing firms that appear to have made little (read “big”) oopsies in the way they’ve been auditing corporate South Africa.

Here’s the thing … The corruption that is being exposed is either making fools of our auditing firms or showing them up to be in bed with their clients. Either they’re laughably so incompetent that their clients are fooling them big time, or they’re horrifyingly unethical and corrupt themselves and quite prepared to overlook the dirty tricks of their clients in the name of “business is business”.

If they are found to have turned a blind eye to unethical and/or illegal financial activities on the part of their clients in the interests of continuing to collect their not insignificant fees, they should also be charged with corruption, and/or aiding and abetting corrupt activities.

Another, more uncomfortable question that needs to be asked is: As the foremost accountancy body in South Africa and one of the leading Institutes in the world (so says their web site), what is SAICA itself doing about those of its members who are the auditors who have failed to uncover corrupt accounting practices of their clients? Are they quite happy to be associated with either incompetent or corrupt members?

Another question to be asked is: Are they, as the professional body tasked with overseeing their profession, investigating allegedly unethical members and holding them to account, if need be?

While I have no personal axe to grind, it would be interesting to know if Bosasa’s auditors are members of SAICA and whether SAICA has taken any steps to investigate their role in the alleged corruption that is being revealed at the Zondo Commission.

That begs another uncomfortable question: If no action is being taken against such members, why not?

Ethical South Africans, I urge you to stand up and start making your voices heard! For too long the unethical among us have shouted down the voices of honest people and brought shame upon our country. That will only stop when ethical and honest men and women do something to put a stop to it.

Alan Hosking is the Publisher of HR Future magazine, www.hrfuture.net, @HRFuturemag. He is a recognised authority on leadership skills for the future and teaches experienced business leaders and Millennial managers how to lead with integrity, purpose and agility. In 2018, he was named by US-based web site Disruptordaily.com as one of the “Top 25 Future of Work Influencers to Follow on Twitter“.

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