/ 20 February 2012

Transnet coup a ‘major milestone’ for audit profession

Transnet Coup A 'major Milestone' For Audit Profession

South Africa’s logistics and transport parastatal, Transnet, has awarded a R350-million auditing contract to a black-owned firm — a major milestone in the transformation of the accounting and auditing profession, Public Enterprises Minister Malusi Gigaba said at an event announcing the contract on Monday.

“The appointment is the first in South Africa for a locally grown and black-owned firm to handle the entire audit account of a corporate the size of Transnet,” he said.

Gigaba said in an industry still dominated by white professionals, black-owned companies still face barriers in acquiring work from the private and public sectors. The widespread failure of start-up black-owned firms is an apparent concern.

The sector, he said, is struggling to transform and it is time to look at the role the state could play in achieving transformation objectives. “This is government’s money and we want it to be spent in a way that advances government’s policies,” he said.

Gigaba, in his capacity as a Transnet shareholder, was responsible for appointing the auditors; the audit committee only made recommendations.

He said the appointment of a black-owned company would also encourage the big four auditing firms (Deloitte, KPMG, PricewaterhouseCoopers, Ernst & Young) to really address transformation within their own companies.

The company, SizweNtsalubaGobodo, was selected out of three bidders based on criteria set by the audit committee of Transnet’s board of directors. The contract is for an estimated R70-million over a period of five years. “I have no doubt we have selected one of, if not the best [firm] in the country,” said the board’s chair, Mafika Mkwanazi.

“For a long time it was accepted that black business would only go as far as small to medium, we refuse to accept the status quo,” said Nonkululeko Gobodo, SizweNtsalubaGobodo’s executive chair.

The chief executive of SizweNtsalubaGobodo, Victor Sekese, said he was delighted a company of such magnitude had shown confidence in the firm.

“We are aware that our performance in the Transnet account will determine the fate of local players in the future,” he said.

Transnet said it had looked at the team which would be involved, comprised of 150 personnel, and were satisfied that they had the expertise required.

Skills development, Gigaba said, is a big part of transformation objectives. He said he had asked all state-owned enterprises to stretch their skills targets and received a good response.

Of Transnet’s R300-billion capital investment programme, R7.7-billion will be spent on skills development, while a further R6-billion will go toward bursaries and other training.

Gigaba said he was confident other state-owned enterprises will follow suit. Plans are already being discussed for Eskom to support the accounting departments in historically black universities, he said.