Accountants, Auditors have a Responsibility to Shareholders
The interrogation of management by auditors is an integral part of good governance, says Irene Charnley, MTN director.
The accounting and auditing profession has a role to guard the interests of a firm's stakeholders.
Auditors should be on the alert to see through the deceptions dishonest management and company directors use, she said.
Charnley said there was an understandable and "correct outcry to purge the accounting and auditing profession of unacceptable practices".
She was speaking at the SA Institute of Chartered Accountant's conference on Changing the Face of Business, held in Sandton yesterday. Charnley said calls were being made for stringent regulations and an overhaul of the accounting and auditing standards.
She said there was scope for improvement in accounting and auditing practices. However, she said it was "the message and not the messenger at fault".
Charnley said the accounting and auditing profession was needed more than ever before.
For the profession to play and fulfil its rightful role, it needed to go back to old-fashioned basic concepts such as ethics, integrity, honesty, truth, trust and trustworthiness, she said.
Charnley said the second King report on corporate governance "encapsulated the characteristics of good corporate governance". A firm was likely to enjoy indirect economic benefits, such as better productivity and corporate reputation, if it took characteristics cited in the report into account.
Charnley said the accounting and auditing profession should be aware of companies manipulating financial statements.
Managers who lied to their directors and auditors should be sent to jail. The same fate should befall auditors who connived with management to mislead investors, she said.
With acknowledgements to Sanchia Temkin and Business Day.