South Africa has lost the top spot in its strength of auditing and reporting standards in the World Economic Forum Global Competitiveness Report of 2017 – 2018.
Finland is currently holding the top spot, showing a steady advancement up the table through recent years, it is closely followed by Norway in second and Singapore in third place. Israel has been showing strong growth as it has improved from position 28 in 2010 to position 13 this year.
South Africa has dropped to 30th place in the audit rankings with a score of 5.4 compared to last year where South Africa had scored 6.7 out of a maximum of 7. South Africa had previously held the top spot for seven years since 2009 – 2010, and prior to that it was in second place.
The South African audit regulator, the Independent Regulatory Board for Auditors (IRBA) expressed its regret but stated that they had expected this result. IRBA CEO Bernard Agulhas said that this drop in confidence has indicated that South Africa is no longer seen as a good investment, and now the market suffers the consequence.
Agulhas said: “Given that our financial markets and institutional ranking slipped in a number of areas including strength of securities exchange, efficacy of corporate boards, protection of minority shareholders’ interests, decline in strength of investor protection and ethical behaviour of firms, the result is predictable.”
South Africa also lost in the overall global competitiveness rankings as it has dropped from 47 to position 61.