Original Research

To report or not to report

Warren Maroun, Harvey Wainer
South African Journal of Economic and Management Sciences | Vol 16, No 1 | a332 | DOI: https://doi.org/10.4102/sajems.v16i1.332 | © 2013 Warren Maroun, Harvey Wainer | This work is licensed under CC Attribution 4.0
Submitted: 03 November 2011 | Published: 26 February 2013

About the author(s)

Warren Maroun, University of the Witwatersrand, South Africa
Harvey Wainer, University of the Witwatersrand, South Africa

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Abstract

Whistle-blowing can play an important role in enhancing the effectiveness of corporate governance processes. In particular, legislation mandating that auditors blow the whistle on their clients’ transgressions can assist in overcoming agency-related costs and improve confidence in external audit. This is, however, only the case if regulatory reform enjoys cohesion. The Companies Act No. 71 of 2008, by introducing a definition of ‘reportable irregularities’ different from that in the Auditing Profession Act No. 26 of 2005 (APA); excluding ‘independent reviews’ from the scope of APA; and effectively exempting the majority of South African companies from the requirement either to be audited or reviewed, may materially undermine whistle-blowing by auditors in South Africa. In turn, this begs the question: for how long will South Africa rank first globally for the quality of its auditing practices? 


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