South africa wants to dismantle big four auditors after scandals

South Africa's government has announced plans to dismantle the "Big Four" auditing firms - Deloitte, EY, KPMG, and PwC - following a series of scandals and controversies involving these firms.

The decision was made after a report by the Public Protector, a constitutional institution responsible for investigating allegations of impropriety, found that the Big Four auditors had failed to detect and prevent financial irregularities at state-owned companies, including the South African Revenue Service (SARS) and Eskom, the country's largest power utility.

The report, released in August 2020, accused the Big Four auditors of being complicit in the looting of state funds and of failing to perform their duties as independent auditors. The report also found that the auditors had close ties to the ruling African National Congress (ANC) and had benefited financially from their relationships with government officials.

In response to the report, the South African government announced that it would be taking steps to dismantle the Big Four auditors and to establish a new, independent auditing firm to replace them. The government also announced that it would be introducing new regulations to improve the oversight and accountability of auditors.

The decision to dismantle the Big Four auditors has been welcomed by many in South Africa, who have long been critical of the firms' close ties to the government and their failure to detect and prevent financial irregularities. However, the decision has also been met with opposition from some quarters, who argue that it is unfair to punish the auditors for the actions of a few individuals and that it could have negative consequences for the country's economy.

The controversy surrounding the Big Four auditors in South Africa is part of a broader global trend of scrutiny and criticism of the auditing industry. In recent years, there have been numerous scandals and controversies involving auditors around the world, including the collapse of auditing firm Arthur Andersen in the wake of the Enron scandal in the United States.

The South African government's decision to dismantle the Big Four auditors is seen as a significant step towards improving the transparency and accountability of the auditing industry in the country. However, it remains to be seen whether the government's plans will be successful in achieving this goal, and whether the new, independent auditing firm will be able to restore public trust in the industry.