Firm rotation announcement shocks CFOs

The CFO Forum has said it is “deeply concerned” by the decision to introduce mandatory audit firm rotation (MAFR) for South African business.

The forum said in a recent statement:

"The decision - announced on Friday by Finance Minister Malusi Gigaba - flies in the face of ongoing discussions with the parliamentary standing committee on finance and its commitment to explore audit independence problems and solutions before a decision is taken… This [decision] does not bode well for the relationship between government and business‚ and we urge the minister to reconsider his decision and instruct IRBA to undertake broader‚ proper consultation before making any final decisions."

The Forum, which represents the CFOs of the top 100 JSE-listed companies, said that the standing committee had received strong objections to MAFR from five financial governance structures, including the CFO Forum, the Association for Savings and Investment South Africa‚ the Institute of Directors‚ the King Committee, and the Audit Committee Forum. It added that the ongoing process should be respected and that the Independent Regulatory Board for Auditors (IRBA) should not rush into a decision without understanding the consequences. It has also requested an urgent meeting with Minister Gigaba.