The ‘Big Four’ audit firms — Deloitte, EY, KPMG and PwC — all play a systemic role in economic crimes and State Capture. The evidence suggests that these firms have prioritised profit over professional duties and the law. In July 2020, Open Secrets released the latest ‘Corporations and Economic Crime Report Volume 2: The Auditors’ — draws on information from Open Secrets’ investigations and publicly available information to illustrate the crisis faced by the auditing industry and how this impacts on the public. We have written about Deloitte, PwC and EY in past instalments of Unaccountable. This week we turn to PwC and Nkonki, the auditors that repeatedly gave SAA a clean bill of health while fraud and corruption soared.
For more than a decade, South African Airways (SAA) has been a drain on an already strained public purse, while systemic corruption and mismanagement has hollowed out the state-owned airline. Public ire has rightly been directed at Dudu Myeni and other directors who oversaw the long-term decline of SAA. Yet what of the auditors that cashed in on contracts while turning a blind eye to malfeasance?
Counting the cost of the destruction of SAA
Corruption and mismanagement at SAA have cost SAA employees and the broader public dearly. The state has spent more than R50-billion on bailouts to SAA since 2008. Treasury told Parliament bluntly in 2021 that “the value from this contribution has not been seen”. Many of the recent bailouts have been made in the context of a reduction in spending on essential public services.