The Standing Committee on the Auditor-General (SCoAG) recently warned that the future appointment of the Auditor-General of South Africa’s (AGSA) external auditor will not be a rubber-stamp exercise.
The Chairperson of the committee, Mr Wouter Wessels, noted that recent media reports about the AGSA’s external auditor have created a reputational risk for the country’s supreme audit institution that cannot be ignored. The committee today discussed the matter in which the AGSA’s external auditor, Crowe’s Gary Kartsounis, was reportedly involved in a controversial valuation involving a Public Investment Corporation transaction concerning Lanseria Airport. Media reports have also highlighted adverse findings against the audit partner by the Independent Regulatory Board for Auditors (IRBA).
The Chairperson of the AGSA’s independent Audit Committee, Ms Grathel Motau, told Members the committee was not informed of the IRBA matter at the time of the appointment of the external auditor or during the processes that were taking place. She said Crowe explained the omission as an oversight. Members also heard that additional assessments conducted found no evidence that the financial statements for the year ended 31 March 2026 were misstated or that the opinion given was not accurate.
The committee expressed concern that the due-diligence and disclosure requirements the AGSA is subject to may be inadequate. Members suggested that the AGSA explore options to ensure disclosure of regulatory investigations and adverse judgments beyond the assurance provided by the audit partner. They also asked about the contractual or legal remedies available and whether the AGSA was considering using another audit firm. The committee also suggested that the AGSA expand its pool of eligible firms.
Mr Wessels observed that even if the financial statements and audit opinion were not compromised, the matter sparked a public relations and reputational risk that needed to be addressed. He said that although Crowe’s contract was due to extend through to 2028, the Public Audit Act required that the Auditor General’s external auditor be approved by SCoAG each year. According to the Chairperson, this statutory responsibility meant the committee could not arrive at its November consideration without alternatives to consider. “There can be no rubber-stamp exercise, particularly considering the non-disclosure, the issues that have arisen and the reputational concerns,” the Chairperson said.