Emigration and low maths literacy hurt top audit firms

South Africa’s auditing profession faces a skills shortage due to low mathematics literacy, emigration, and a negative perception of the industry.

Independent Regulatory Board for Auditors (Irba) CEO Imre Nagy said most of the country’s top audit firms have flagged the profession’s attractiveness as a growing challenge.

The industry lost its lustre because of high entry requirements to study accounting, high tuition fees, low pay, high work stress, and negative publicity about the auditing profession.

The skills shortage is exacerbated by low maths literacy in South Africa, which significantly reduces the number of students able to study accounting. 

In addition, several push-and-pull factors, such as political and socioeconomic instability, drive the emigration of highly skilled professionals.

Irba recently accredited the Association of Chartered Certified Accountants (ACCA) as an additional professional accounting body to address the skills shortage. 

This will provide another route to the audit specialisation programme for aspiring auditors.

Irba is also undertaking a situational analysis to restore confidence in the role of auditors and the regulator. 

This includes closer collaboration with auditors without compromising the regulator’s independence.

Irba aims to issue a discussion paper next year to highlight the top five gaps identified in the ecosystem with recommendations that will address these gaps.

One skills crisis among many

The accounting sector is not the only industry in South Africa facing a skills shortage, with financial advisory firm PwC highlighting several others. 

PwC South Africa’s chief economist, Lullu Krugel, warned that a lack of skills, particularly “green skills”, threatens South Africa’s economic future. 

Green skills refer to those used in renewable energy generation and the associated technologies. 

According to a report by the International Development Corporation and the Development Bank of Southern Africa, transitioning to renewable energy generation can create 460,000 jobs in South Africa. 

However, a lack of skills will prevent the country from realising the true potential of that transition. 

Krugel said South Africa is unique because it simultaneously has high unemployment and scarce skills. 

This potent combination can seriously handicap economic development and growth over the next few years and even decades, as there is no quick solution. 

“We currently do not have the correct mix of skills available to drive economic growth and reduce unemployment,” Krugel said. 

South Africa is falling short in high-tech sectors specifically. Solving such a problem would require tremendous changes to education in the country. 

However, these changes are unlikely, so companies have taken it upon themselves to upskill their employees.