COSATU welcomes the President’s signing of the Auditing Profession Amendment Act

 The Congress of South African Trade Unions (COSATU) welcomes President Ramaphosa’s signing of the Auditing Profession Amendment Act into law.  The Auditing Profession Amendment Bill will be a critical tool in the fight against the state and corporate capture and corruption.  The Federation supports the speedy implementation of this progressive Amendment Act by the government.

 Auditors have a legal and fiduciary duty to ensure good governance in both the public and private sectors.  It has been extensively shown at the many sessions of the Commission of Enquiry into corruption state capture, that countless auditors were not only complicit but in many cases helped to facilitate the industrial looting of state and private sector companies.

 Workers are now paying the price in the collapse of key SOEs and municipalities, the disintegration of badly needed public services, and in many cases lost wages and retrenchments.  Workers in the private sector have not emerged unscathed as supposedly clean publicly listed companies were fleeced.  Here too workers have lost wages and jobs.  Public and private sector workers’ hard-earned pensions too were pickpocketed when they were invested in such companies.

The Auditing Profession Amendment Act includes many progressive provisions, such as:

·         Prohibiting practising auditors from serving on the Independent Regulatory Board of Auditors (IRBA) and its investigating and disciplinary committees to avoid conflicts of interest.

·         Capacitating IRBA to conduct search and seizures of auditors as needed.

o   Despite attempts to block this by some dubious elements in the auditing fraternity, this is critical to ensure IRBA is fully capacitated to hold implicated auditors accountable.  Criminals do not need diplomacy.

·         Empowering IRBA to institute disciplinary procedures and impose sanctions, including deregistering offending auditors.

COSATU is however worried that the Amendment Act does not go far enough.  Despite the Federation raising it repeatedly during public hearings in Parliament and with the government in 2019, 2020, and 2021, Treasury has refused to entrench into law the existing IRBA rule requiring the mandatory rotation of auditors.  This must be elevated to a legal obligation, not merely an informal rule that can easily be abandoned if corrupt persons return to power.  This is against the background of worrying governance noises recently at IRBA.  This is extremely dangerous and reckless.

Government must be bold in dealing with corruption and the failures of auditing firms to uphold their legal duties.  The timidity government has shown in dealing with corrupt elements will not enable us to clean up the state.  Parliament and Treasury need to address this concerning weakness in the Amendment Act as a matter of urgency.

Issued by COSATU.

For further information, please contact: Matthew Parks- COSATU Parliamentary Coordinator

Cell: 082 785 0687