Raymond Doherty 18 Dec 2017 01:25pm

Deloitte South Africa investigated over Steinoff audit

South Africa’s audit regulator has announced a probe into Deloitte over alleged accounting irregularities at its client Steinhoff International

The investigation of the Big Four firm, which has audited Steinhoff for almost 20 years, concerns the financial years ended 2014 – 2016, the Independent Regulatory Board for Auditors (IRBA) said.

Earlier this month the group, which owns Poundland as well as 6,500 retail outlets and 40 brands worldwide including Bensons for Beds and Harveys in the UK, revealed it had appointed PwC to conduct an independent review into the accounting irregularities.

It said new information had emerged which required investigation and added that it had been unable to publish its financial results as a result.

Its chief executive Markus Jooste then stood down with immediate effect. Shares in the company have since plunged over 80%.

Announcing the investigation on Friday, Bernard Agulhas, CEO of the IRBA said, “The investigation will follow due process and the timing will depend on information which will come to our attention once we have established the nature of the alleged irregularities.”

He added that the IRBA had been discussing “jurisdictional responsibilities” with the relevant parties, “including the audit regulators in Germany, where the company has its primary listing, and the Netherlands”, and that these talks would continue.

Deloitte South Africa has been contacted for comment.

This is the second major accounting scandal to rock a Big Four firm in South Africa in recent months, after KPMG had to replace its entire leadership and lost a number of clients over its ties to the Gupta family.