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SAA auditors could face probe by oversight body

Oct 06 2017 07:29
Liesl Peyper

Cape Town – The auditors responsible for signing off on South African Airways (SAA) annual reports in the 2015/16 financial year could be investigated, the Independent Regulatory Board for Auditors (IRBA) said this week.

Bernard Agulhas, IRBA CEO, told journalists on the sidelines of a Parliamentary briefing that IRBA’s investigations committee will in October take a decision whether to dismiss the issue, impose a fine, or take disciplinary action against Mkongi and PricewaterhouseCoopers – the auditing firms responsible for signing off on SAA’s annual financial statements for the 2015/16 financial year.

The IRBA is a statutory body that oversees parts of the accountancy profession involved with public accountancy.  

Alf Lees, DA spokesperson on finance, asked Agulhas during Tuesday's briefing whether the IRBA would launch an investigation into the two auditors’ oversight.

“I am concerned about the fact that these auditors accepted that SAA was a going concern and clearly the airline wasn’t. Was there any delinquency in accepting the going concern assumption, because in August last year, SAA was definitely not a going concern,” he said.

Lees first raised alarm over the auditing of the cash-strapped airline in September last year when he asked IRBA to investigate the “failure” of the SAA auditors to qualify the 2015/16 SAA annual financial statements.

On Friday, National Treasury stepped in for the second time this year to save SAA by giving it a R3bn bailout.

If Treasury hadn’t stepped in to provide last-minute funding, the national carrier would have defaulted on a loan granted by US lender Citibank.

At the end of June, SAA received R2.2bn from Treasury in order to pay Standard Chartered, which also declined to renew its loan facility to the ailing airline.

SAA recorded a loss of R1.5bn in the 2015/16 financial year, which rose to R4.7bn in 2016/17. It has already made a R1.3bn loss in the current financial year to July.

SAA is seeking R5bn from government for its 2018 financial year, followed by R5bn in the 2019 financial year and R3bn in the 2020 financial year.

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saa  |  irba  |  bernard agulhas  |  financial health  |  auditing
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