So you have signed articles. You chose the firm because you want to work on their clients. You can’t wait to get to know these client companies better. You might not be aware of it but mandatory auditor rotation in SA might soon mean that you will be working on a whole new set of clients!
My talented UCT colleague, Michael Harber, recently completed his Masters on this topic. He interviewed many audit partners earlier this year and has summarised the key concerns they have in the following Moneyweb article.
Here are some quotes from the article:
A senior partner from one of the black-owned audit firms (who are expected to gain the most from MAFR) expressed the concern that MAFR may simply become a “game of musical chairs” among the big four, thereby reducing market competition, as well as promoting low-balling of fees to secure the appointments.
However, not all audit partners are against MAFR. Black-owned audit firm Nkonki welcomed the announcement. According to Nkonki’s managing partner Mitesh Patel, “A lot of second-tier firms have the capability to audit JSE-listed companies but are not getting the opportunities due to longstanding relationships held by the big four”.
I highly recommend that you read the article in full here and stay informed about what your future might now look like. What are your thoughts on this proposed change?
Got any questions? I might not be able to answer them but Michael is just a few doors away from my office and I will hunt him down!