CORPORATE GOVERNANCE PRACTICES IN LARGE AND MEDIUM-SIZED AUDITING FIRMS IN SOUTH AFRICA

Rozanne Smith, Ben Marx

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)

Abstract

South African corporate failures and audit failures, including those of VBS Bank, Tongaat, Steinhoff and KPMG, have exposed vulnerabilities in audit quality and the role of governance failures in auditing firms. In auditing firms, good corporate governance principles are not always followed. Additionally, South Africa does not have a corporate governance code that governs auditing firms, nor is there a sector supplement to the King IV Report on Corporate Governance that applies to other industries. To identify areas for improvement in South Africa, this study aimed to ascertain the current corporate governance practices in South African auditing firms and compare them to the United Kingdom (UK) Audit Firm Governance Code. A structured questionnaire based on the UK Audit Firm Governance Code was used to collect qualitative data. Nine large and medium-sized South African auditing firms with 20 or more auditing partners made up the population. The literature study emphasised the value of good corporate governance in auditing firms, as well as the difficulties these firms encounter with corporate governance. The review also emphasised the absence of codes and standards regulating corporate governance in auditing firms. The empirical results highlighted the resultant inconsistencies in corporate governance application in South African auditing firms. Areas requiring improvement were identified in the study.

Original languageEnglish
Pages (from-to)202-220
Number of pages19
JournalInternational Journal of Management and Sustainability
Volume11
Issue number4
DOIs
Publication statusPublished - 29 Nov 2022

Keywords

  • Auditing firms
  • Corporate governance
  • Independence
  • King IV report
  • Oversight board
  • Principles
  • UK audit firm governance code

ASJC Scopus subject areas

  • Geography, Planning and Development
  • General Business,Management and Accounting
  • Economics and Econometrics
  • Management Science and Operations Research
  • Management, Monitoring, Policy and Law

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