Probes follow accountants

The number of accountants being investigated by professional bodies is through the roof, as the profession tries to arrest the reputational carnage wrought by a string of corporate scandals.

Last month, the SA Institute of Chartered Accountants (Saica) reported that 265 investigations were underway, more than four times that of 2013. The Southern African Institute for Business Accountants (Saiba) also reports a spike in investigations, driven in part by a growing awareness of the responsibility accountants have to report wrongdoing.

Trust in the profession divebombed after a string of accounting-related scandals, from stateowned companies to Steinhoff and VBS Bank.

Addressing Saica in June, former finance minister Trevor Manuel said South Africa’s accountants had become too comfortable being ranked number one in the world. Even the Gupta family got in on the act, using their money to buy an audit firm, presumably to come up with audit results that would escape more serious scrutiny.

Then came the Steinhoff debacle and accusations of accounting fraud resulting in the wipeout of billions in shareholder value. Accountants started to feel the heat.

“People are more aware that they can complain,” says Saiba chief executive Nicolaas van Wyk.

“And in some cases, the complaints are coming from those who are getting no joy in the courts, so they are trying another avenue of redress.”

It’s clear that becoming an accountant is no longer a soft ride.

Van Wyk says it has always been a requirement in common law for accountants to report wrongdoing, but it wasn’t being done. “It boils down to the nature of the profession.

“Their first duty is to act in the public interest, then the client’s interest, and I think that’s where some of these bigger accounting firms lost the plot. They were more concerned with fees than the public interest.”

Another reason for the surge in investigations by professional bodies is the increasingly onerous and complex regulatory environment.

Last year, the International Ethics Board for Accountants issued a guide for auditors and professional accountants known as NonCompliance with Laws and Regulations (Noclar), which details what actions to take in the public interest when they become aware of a possible illegal act.

Moneyweb

The Nova Property Group has withdrawn a controversial proposal to convert the former Sharemax investors’ debentures into shares and to list the company on the JSE.

The original proposal caused quite a stir last year and failed when Rudi Badenhorst, the company’s then financial director, labelled the proposal penned by Nova chairperson Connie Myburgh, as “daylight robbery”.

Badenhorst specifically referred to the 43% interest the directors would have received in such a new company, while about 197 000 investors – who collectively invested more than R4.5 billion in Sharemax – would have received only 34.5%.

The directors also didn’t pay for their original shares in Nova and would have received their 43% for free.

Dear Mr Van Niekerk, It is regrettable that our efforts in engaging Moneyweb openly, constructively and in a bona vide fashion has not been reciprocated.

In response, Moneyweb has chosen to publish articles without prior