The Independent Regulatory Board for Auditors (IRBA) confirmed on Friday that it had initiated an investigation into audit firm, Deloitte South Africa, following the share price collapse of South African-based multinational retail giant, Steinhoff International DV, and allegations of accounting irregularities.
The IRBA had a meeting with Finance Minister Malusi Gigaba on Friday to discuss implications to the auditing practice arising from the Steinhoff International debacle.
Steinhoff was thrown into controversy last week, after its long-time chief executive, Markus Jooste, resigned in a huff following his admission to “accounting irregularities” as German authorities, where Steinhoff has primary listing, began probing its financials.
IRBA chief executive, Bernard Agulhas, said that the auditors’ regulatory body would commence its investigation into the conduct of the auditors of Steinhoff for the audits of financial years ended 2014 to 2016.
Steinhoff is audited by Deloitte South Africa, who has confirmed that it will fully cooperate with the IRBA during the investigation.
“The investigation will follow due process and the timing will depend on information which will come to our attention once we have established the nature of the alleged irregularities and have had further discussions with the relevant parties, including the audit regulators in Germany, where the company has its primary listing, and the Netherlands. These discussions, including matters relating to jurisdictional responsibilities, commenced in the previous week.”
Agulhas said that while cooperation with international regulators would be important, it would be even more important that local regulators coordinate their efforts in their support to government to provide the public with the assurance needed to secure the required trust that their investments are safe.
“The South African markets have always been resilient and responsive to disruption in the financial markets, partly because of the strength of its financial institutions, and also because of the South African public’s increasing awareness and renewed focus on ‘doing the right thing’, ethics and the importance of good governance,” Agulhas said.
The IRBA said it now urges authorities and bodies to give equal attention to the independence of governance structures though it has always cautioned that more attention needs to be given to auditor independence.
“While the auditing profession still mostly delivers high quality services, it is also time for regulators to act decisively, cohesively and firmly against those who engage in any misconduct or wrongful behaviour,” Agulhas said.
“This is the only way that the public can have the confidence that any assurances they receive are sufficiently reliable to protect their hard-earned investment.”
– African News Agency (ANA)
