Ever since I was little, I have always wanted to be an auditor. As absurd as this may seem, it is the truth. While most kids dreamed about flying fighter planes or riding on a red choo-choo, I dreamed of money and the prestige of having a CA (SA) next to my name. But all this is about to change.
A short while ago, I read an article in the FM magazine, which basically wrote that auditors have an unlimited personal liability. (Seriously?!?!?!) In other words, if I was to audit a limited liability company and I failed to pick up on fraudulent activities, investors of the said company could initiate a lawsuit against me and I would have to pay for the damages. (Recent case study: one of the big four auditing firms, PricewaterhouseCoopers, is being sued for R7.6 bn for failing to disclose the fraud relating to the late Brett Kebble.) No wonder the country is struggling to recruit more auditors into the field (the number currently stands at 4 500, and has been for the past several years).
When doctors malpractice, they are covered by insurance. When a Pty (Ltd) goes bust, it is protected by limited liability. So, why should an audit company have to operate with potential million-Rand lawsuits breathing down its neck? SAICA has since been pushing for a more equitable position whereby liability is shared or limited to a multiple of the audit fee, but the proposal has been “universally rejected”.
One of the reasons why I chose auditing as opposed to financial management was because I was under the illusion that financial managers worked under a great amount of stress, while auditors did not (relatively speaking of course). The illusion has since been cleared. Luckily, I have not yet signed away my soul to anyone, so I still have a couple of options left: 1) Stay on the auditing path and hope I don’t get sued, or 2) Change to financial management and sign with Investec or one of the banks.
Thoughts/feedbacks are welcomed.