Dr Iqbal Survé hon­oured to join In­ter­na­tional Bridges to Jus­tice’s ad­vi­sory board

The Star Early Edition - - OPINION & ANALYSIS - Adri Senekal de Wet Si­mon Mantell

THE GENEVA-based In­ter­na­tional Bridges to Jus­tice (IBJ), one of the most pres­ti­gious global NGOs, an­nounced the ap­point­ment of Sekun­jalo Group chair­man Dr Iqbal Survé to its global ad­vi­sory board in Switzer­land last week.

Karen Tse, the chief ex­ec­u­tive and founder of IBJ, ex­pressed her ex­cite­ment “to have fi­nally con­vinced Survé, af­ter eight years of try­ing, to serve on the global ad­vi­sory board of IBJ”.

“Dr Survé is an in­flu­en­tial African en­tre­pre­neur, a global busi­ness leader and a recog­nised phi­lan­thropist; he is the most in­flu­en­tial busi­ness leader in Africa with the vi­sion to shape the fu­ture of the African con­ti­nent,” Tse said.

Survé cur­rently serves as a pa­tron or board mem­ber of a num­ber of NGO’s across the globe, and Survé phi­lan­thropies through its seven af­fil­i­ated foun­da­tions, which sup­port ini­tia­tives in chil­drens’, women and hu­man rights; cli­mate change; health­care so­lu­tions for the poor; ed­u­ca­tion and science; arts and cul­ture; so­cial en­trepreneur­ship and im­pact in­vest­ing.

Tse said she was de­lighted that af­ter eight years she con­vinced Survé to share his out­stand­ing lead­er­ship skills and phil­an­thropic ex­pe­ri­ence with IBJ.

“We re­spect Dr Survé for his med­i­cal work with vic­tims of apartheid and pro­vi­sion of med­i­cal care to a num­ber of prom­i­nent South Africans dur­ing and af­ter their re­lease from Robben Is­land.

“IBJ fo­cuses on end­ing tor­ture around the world by guar­an­tee­ing all cit­i­zens the right to com­pe­tent le­gal rep­re­sen­ta­tion, the right to be pro­tected from cruel and un­usual pun­ish­ment, and the right to a fair trial. I am there­fore very ex­cited to wel­come Dr Survé on the Ad­vi­sory Board of IBJ”, she said.

Survé was hon­oured by Amnesty In­ter­na­tional in Paris in 1989 at Unesco for his med­i­cal and eth­i­cal work with vic­tims of de­ten­tion and tor­ture.

IBJ’s fo­cus cen­tres on the abuse of pris­on­ers. They found that 113 coun­tries around the world still prac­tice sys­tem­atic tor­ture, but of this num­ber, 93 nations had passed leg­is­la­tion declar­ing tor­ture il­le­gal. “It is ex­tremely hard to get peo­ple to care,” Tse said. But so­ci­ety needs to care, she ar­gued, be­cause “at the end of the day, the rule of law is the bedrock of a sta­ble so­ci­ety”.

Survé in­di­cated that Tse had tried to con­vince him to join the IBJ ad­vi­sory board for a num­ber of years, but due to his busy sched­ule and global com­mit­ments he was not then able to ac­cede to this re­quest.

He said: “How­ever, the plight of pris­on­ers, be they im­pris­oned for petty crime, for refugee sta­tus as im­mi­grants or wrong­fully im­pris­oned, es­pe­cially in de­vel­op­ing and poor coun­tries, where they have no ac­cess to le­gal rep­re­sen­ta­tion, has be­come a ma­jor global is­sue.

“Pris­on­ers are of­ten kept for long pe­ri­ods of time with­out hav­ing gone to trial or be­ing con­victed. Many pris­on­ers are of­ten abused by au­thor­i­ties, sim­ply be­cause they don’t have the means to de­fend them­selves.

“The plight of pris­on­ers is an ex­ten­sion of my own work, which I did dur­ing the apartheid years with po­lit­i­cal pris­on­ers, recog­nis­ing the trau­matic ef­fects of im­pris­on­ment on their men­tal, psy­cho­log­i­cal and phys­i­cal well­be­ing. The work of the IBJ, while not fo­cused ex­clu­sively on po­lit­i­cal pris­on­ers, is an ex­ten­sion of this work. I am there­fore hon­oured and look­ing for­ward to work­ing with Karen Tse and the IBJ Ad­vi­sory Board,” Survé said. Dr Survé is the chair­man of Survé Phi­lan­thropies and seven af­fil­i­ated foun­da­tions. He is also the pa­tron of the Worlds Chil­dren’s Prize for the Rights of the Child, a founder mem­ber of the Clin­ton Global Ini­tia­tive, and twice hon­oured by Pres­i­dent Clin­ton for his work on phi­lan­thropy and im­pact in­vest­ing.

THE IN­DE­PEN­DENT Reg­u­la­tory Board for Au­di­tors’ (Irba) re­cent pro­posal of manda­tory au­dit firm ro­ta­tion (MAFR) for listed en­ti­ties has at­tracted sig­nif­i­cant crit­i­cism from the Chief Fi­nan­cial Of­fi­cers’ (CFO) Fo­rum, which rep­re­sents chief fi­nan­cial of­fi­cers of ma­jor JSE listed and sta­te­owned com­pa­nies.

MAFR comes at a time when is­sues of au­dit in­de­pen­dence, the main­te­nance of au­dit and re­port­ing stan­dards as well as trans­for­ma­tion rep­re­sent key touch points for the pro­fes­sion.

Au­dit in­de­pen­dence is care­fully en­shrined in all laws gov­ern­ing the pro­fes­sion and re­mains the bedrock of the pro­fes­sion’s rep­u­ta­tion – a non-ne­go­tiable if the re­port of the au­di­tor is to re­main rel­e­vant for all users of fi­nan­cial state­ments.

Be­fore con­sid­er­ing some of the con­cerns raised by the CFO Fo­rum, at­ten­tion must be drawn to a dilemma unique to the au­dit pro­fes­sion which in­volves:

The re­quire­ment that the pro­fes­sion must schizophreni­cally serve numer­ous “mas­ters”, be­ing all users of fi­nan­cial state­ments as op­posed to the client ex­clu­sively.

The fact that the au­dit firm is ex­pected to be in­de­pen­dent of the client, yet the au­dit fees paid by the client con­sti­tute the liveli­hood of the pro­fes­sion.

The re­cent CFO Fo­rum press re­lease raises many ob­jec­tions with re­spect to the Irba’s pro­posed MAFR, which in­clude but are not lim­ited to:

The po­ten­tial to cost bil­lions of rand to im­ple­ment.

The fail­ure by the Irba to pro­vide ev­i­dence of lack of au­di­tor in­de­pen­dence and how MAFR will fos­ter greater in­de­pen­dence.

The global fi­nan­cial cri­sis in 2008 be­ing jus­ti­fied as mo­ti­va­tion for more au­dit in­de­pen­dence.

MAFR will cause loss of in­sti­tu­tional knowl­edge.

Au­dit qual­ity

At first blush, the CFO Fo­rum makes a good ar­gu­ment for MAFR be­ing un­nec­es­sary, es­pe­cially when South Africa is an in­ter­na­tional leader in re­port­ing stan­dards and au­dit qual­ity. But, au­di­tors will be aware that of­ten things are not al­ways what they seem. So, will MAFR cost bil­lions of rand to im­ple­ment?

The Amer­i­can CPA Jour­nal pro­vides com­pelling ev­i­dence with re­spect to the 12 600 pub­lic com­pa­nies reg­is­tered with the US Se­cu­ri­ties and Ex­change and the sub­ject of vol­un­tary au­dit ro­ta­tion. Be­tween 2003 and 2006, there were 6 543 au­di­tor changes, mean­ing more than 50 per­cent of pub­lic com­pa­nies in the US changed au­di­tors in a four year pe­riod.

Would 50 per­cent of US com­pa­nies have cho­sen vol­un­tary au­dit ro­ta­tion over this pe­riod if these de­ci­sions meant ad­di­tional costs in the bil­lions of dol­lars? What about in­de­pen­dence and the fail­ure by the Irba to show a lack of in­de­pen­dence?

He who pays the piper calls the tune to­gether with em­pir­i­cal ev­i­dence of hu­mankind through the ages clearly il­lus­trat­ing that fi­nan­cial rec­om­pense cre­ates an um­bil­i­cal cord of sig­nif­i­cant in­flu­ence which has the propen­sity to cloud judg­ment and the fa­mil­iar­ity of a con­tin­u­ous and all but guar­an­teed au­dit en­gage­ment cre­ates the won­der­ful “old boy” re­la­tion­ship.

Busi­ness risk

Would MAFR have pre­vented the 2008 global fi­nan­cial cri­sis which was a func­tion of busi­ness risk as op­posed to au­dit fail­ure and will MAFR make a dif­fer­ence?

Com­pa­nies very sel­dom fail overnight – it is a process which un­folds over a num­ber of years and there is no doubt that busi­ness risk caused the cri­sis and fail­ures of com­pa­nies like African Bank.

What re­mains unan­swered is whether the au­di­tors of the com­pa­nies which pre­cip­i­tated the global cri­sis ever as­sessed their re­spec­tive clients’ busi­ness and other risks cor­rectly in or­der to de­sign pro­grammes of au­dit work whose re­sults would have iden­ti­fied these risks at an early stage. Is it not au­dit fail­ure when an au­dit firm is un­able to un­der­stand the busi­ness risks of its client?

MAFR will cre­ate a more com­pet­i­tive en­vi­ron­ment which is less con­ducive to al­low­ing au­dit firms to fall asleep at the wheel. Si­mon Mantell runs a bis­cuit fac­tory in Cape Town called Man­telli’s. He is a CA(SA) in busi­ness and served ar­ti­cles with a big four firm.

Dr Iqbal Survé cur­rently serves as a pa­tron, and board mem­ber of a num­ber of NGO’s across the globe, and Survé Phi­lan­thropies through its seven af­fil­i­ated foun­da­tions.

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