From time to time, the press accuses the accountancy profession of poor standards. These criticisms are often based on the Nel Commission report.
When the report was released, the accountancy profession acknowledged that there had been shortcomings. But there is little value to anyone in resurrecting events that took place nearly a decade ago. A commitment to prevent a repeat of similar events is what matters.
In its submission to the Nel commission last year, the South African Institute of Chartered Accountants (Saica) showed that the profession had taken important steps over the past decade to counteract shortcomings. It also outlined measures intended to improve investor protection.
The introduction of a practice review programme in 1995 was perhaps the most important action taken by the profession. Every auditor in public practice is subjected to a review at least every five years. Since its introduction, there has been a steady improvement in standards. Many of those practitioners who did not meet standards have withdrawn from performing the attest function.
To ensure the profession meets world standards, it embarked on a programme to harmonise accounting, auditing, ethical and educational standards with international standards.
This programme is substantially complete, but the profession will monitor standards to ensure they remain in line with international requirements and meet the public's needs.
Saica operates a variety of special interest groups to assist practitioners and regulators improve their standards. These are composed of auditors, regulators and industry representatives.
The interest groups issue guidance on complex accounting, auditing and regulatory issues. They have issued many guideline booklets on insurances, stockbroking, medical schemes and other industries, during the past decade.
These are some of the steps taken so far. Saica is committed to further reform. It has made far-reaching proposals to both the Nel commission and the National Accountancy Consultative Forum to further improve its governance.
Clearly, if the profession is to continue to enjoy the confidence of the public, it needs to be open and transparent.
Saica has recommended that its governing structures should be representative of key stakeholder groups.
Openness and transparency is also needed in the disciplinary processes.
The profession needs to demonstrate that it is taking suitable action against delinquent professionals. Saica's submission called for a speedier and more open process. The board of Saica recently approved similar reforms to its own disciplinary procedures.
Another imminent change is that, from next year, Saica members will have to make annual declarations that they have carried out sufficient education and training to ensure that they remain competent to perform their professional activities. Random checks will be carried out to ensure that the members meet the requirements.
Once all these programmes are fully operational, they will significantly improve the performance of professionals.
But the programmes alone are not sufficient to ensure investor protection.
Saica is but one cog in a regulatory framework. The other cogs also need to be re-engineered and the all cogs need to work effectively in harmony with each other to achieve an effective regulatory framework.
Saica has long argued that auditors cannot ensure that financial statements present information fairly unless accounting standards are given the force of law.
The current framework allows corporations enormous flexibility to present information in the way that best suits them.
It appears all parties agree that laws should be passed to give accounting standards legal clout, but the draft legislation is taking a long time to pass through the various stages.
The King committee's recommendations have gone a long way to improve corporate governance in this country.
But companies are not compelled to follow the recommendations. Inevitably, the riskier the company, the less likely it is to follow adequate governance programmes. Saica has called for corporate governance recommendations to be built into the Companies Act.
Saica also believes the Companies Act and the Insolvencies Act urgently require a major overhaul since they are no longer able to protect investors.
These are some of the issues facing the profession and regulators. More needs to be done, but the government and the regulators also need to come to the party.
* Graham Terry is the deputy chief executive of Saica