Assurance performance summary

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Assurance delivered positive results, driven by our focus on quality, transforming the audit, developing our people and embracing new technologies.

 

Assurance 

“Quality first, purpose always”.

Pieter Hough, Assurance Leader

Our Assurance practice prides itself on bringing enhanced insights and value to our engagement teams and clients, while also driving consistency and quality in the execution of our work. In the coming year, we’ve set ourselves tough targets in winning new, brand-defining appointments. Our commitment to audit quality continues to underpin all that we do.

Our Transparency Report sets out how the firm is governed, details on our audit quality processes, independence and principal risks, together with the challenges we face and how we are responding to them. It also provides an update on our ongoing initiatives to improve audit quality, and how we have adapted our audits to respond to global and local developments, including the COVID-19 pandemic and the advent of the ‘Great Resignation’. Read more on our Transparency Report. 

 

Financial results - revenue

Assurance results

Delivering our strategy

Quality

Our commitment to quality remains the foundational value of our strategy. This year, we continued to reinforce and elevate the importance of delivering quality through consistent leadership messaging and campaigns. This was strengthened in the launch of our “5+1 Reimagined” strategy during the year where the focus on quality was diagrammatically elevated as the strapline or starting point from which the remainder of the strategy unfolds: “Consistently placing quality at the heart of everything we do”.

We prioritised the following Assurance quality objectives in FY21:

  • protect our brand and our reputation;
  • further strengthen our tone at the top with an emphasis on quality culture;
  • committing to actions that set us apart; and
  • striving for continuous improvement.

Our focus on quality was further reflected in our performance in FY21, with 48 audit engagements (2020: 41), representing 94% (2020: 100%) of the audit engagements inspected being classified as compliant, or compliant with improvement required.

Our firmwide system of quality management was also subject to a review during the year, with specific risk objectives being the focus on the back of the full review being performed during FY20. Similar to prior years, the PwC network’s global Quality Management for Service Excellence team conducted the review.

Assurance quality initiatives

During the year we continued with our Assurance Quality campaign (launched in FY20), with the objective of placing greater focus on the quality of our Assurance services. This ongoing campaign aims to ensure more consistent Assurance quality by focusing on the important cultural aspects of engagement delivery, such as fostering a culture of scepticism and challenge. We are also continuing our journey of assessing the risk and return of our Assurance engagements to ensure we achieve a return that allows continual investment in, and focus on, quality. 

In addition, the following quality initiatives were launched during FY21:

  • Continued emphasis by leadership that quality is our number one priority.
  • Fostering a positive narrative around quality:
    • Best audit file awards - following engagement inspections discussed in this report.
    • Sharing our quality success stories from our winning teams.
  • Enhanced people engagement and retention through initiatives such as 'Listening tours'.
  • Responding to changing risk environments, including climate change, local South African events (civil unrest), and other global matters.
  • Continuous development of our engagement teams through regular, focused, and timely training interventions, which we call Methodology Bites and IFRS Snippets.

Responding to COVID-19

The COVID-19 pandemic continued to challenge our Assurance practice during FY21. Our main priority remained keeping our people healthy and giving them the flexibility to care for themselves and their loved ones. We successfully continued operating our business and serving our clients by incorporating and embracing the changes brought about by the pandemic, and our learnings from FY20. Our existing tools and historical investment in technology and infrastructure allowed our people to work in different ways in coordinating and communicating with our clients. This was further embedded during FY21 as working in the COVID-19 environment became the 'new normal'.

Read more about the firm’s response to COVID-19.

Some of our measures of audit quality are included in the table below.

measures of audit quality

Sharpen our market focus

We adopted our current strategy in response to the changing business environment and our commitment to better meet our clients’ needs. In sharpening our market focus, we have made industries the organising principle around which we offer our services to the market. This year we continued to strengthen our industry programme.

Mandatory audit firm rotation, which will come into effect in April 2023, will adversely impact our listed company audit business, as companies will be compelled to award their external audit mandate to another firm. To pre-empt this, we are focusing on winning new external audit clients. In FY21, these included the Absa, Engen, Investec, Ninety One, and Efficient Group external audit mandates.

Beyond our Core Assurance offerings, we are also pursuing a strategy to build our Broader Assurance Services business. Recent successes in this area include our appointment as co-sourced internal auditors of Exxaro and Omnia.

In the coming year, we have set ourselves ambitious targets in winning new external audit mandates and brand-defining co-sourced internal audit appointments.

 

Being commercial

Being commercial means growing our business and adapting our methods to be more efficient and sustainable. 

For the year to 30 June 2021, our revenue reached R4 billion, up 14% from the previous year. We have continued to see growth across all areas of the business this year, including winning several major external audits. We’ve also seen promising growth in Risk Assurance (non-statutory assurance services over areas of risk not covered by the financial statements audit).

Our audit teams continue to enhance the quality and efficiency of our audits by using our Service Delivery Centres (SDCs) to perform standardised audit and administrative procedures. Similarly, our Centres of Excellence (CoEs) apply expertise and advanced technology tools to drive quality and efficiency even further.

Streamlining, standardising, centralising, and automating portions of the audit enable specialists to develop unique perspectives and bring enhanced insights and value to our engagement teams and clients, while also driving consistency and quality in the execution of our work.

In the coming year, we will continue to optimise the way we work through ongoing programmes to digitise our audits, transform our processes and implement our strategic workforce plan.

 

 

Digitising our business

Technology is a key part of how we’re revolutionising the audit experience. But it’s our people who are the heart of the audit. It’s our people, with their unique blend of audit expertise and digital acumen, which set us apart. Bringing them together in innovative ways is at the core of our continued drive for innovation and what we refer to as ‘Tomorrow’s Audit, Today’.

We have been conducting audits since 2009 using Aura, PwC’s global audit documentation system, which is used across the entire PwC network. Aura is supported by PwC’s integrated award-winning data visualisation, analytics, and auditing tools that have been designed to enhance our risk assessment process and facilitate automated testing and data validation to support the different phases of the audit - from planning to execution, through completion. We continue to expand our capabilities, harnessing the power of data to further enhance our audit quality. These auditing tools are accessible via a range of electronic devices ranging from PCs to smartphones, populating audit evidence directly into Aura.

We believe in people-led innovation. In FY21, we have continued the digital upskilling of our Assurance professionals, building on our base data analysis and other technological capabilities to enhance quality and increase efficiency. Our skilled Assurance professionals can use our technology platforms to dig deeper into their client’s data, surfacing audit-related matters, and providing relevant perspectives and insights as a result of audit procedures. Our commitment to digital upskilling and people-led innovation is helping redefine the profession. We’re developing more well-rounded professionals with both digital and audit acumen, and this, in turn, enhances the quality and the audit experience. Automations developed by our people reduce time-intensive routine tasks, allowing more time for performing analysis. Custom data visualisations bring insights to life, and quality is enhanced because work is done more consistently.

In the year ahead we aim to continue to support our people’s journey to greater well-being through continued digital upskilling and continued performance improvement. Through these and other initiatives, we have reduced overtime hours by more than 70,000 hours in FY21. 

Read more about our digital transformation.

 

Inspiring our people

Our people are key to the performance of high-quality work and we continue to recruit and promote talented individuals across Assurance. 

The health and safety of our people remained our top priority as COVID-19 prevailed during FY21. Although we enjoyed a culture of flexible working for several years, investments in technology allowed all of us to shift to home working during the COVID-19 lockdowns. Further than enabling us to work differently, it played a crucial role in connecting our teams and enabling us to support each other in a new way. We introduced a remote working charter to assist with the new way of work.

 

The FY21 Global People Survey measured our people’s engagement in a hybrid working environment. Eighty-four percent of our South African Assurance partners and staff participated in the survey. Despite the disruptions of FY21, it was pleasing to note that a high proportion of our Assurance staff rated their work experience favourably. Some of the highlights from the survey are included below:

At the end of FY21, we experienced an increase in staff attrition, in line with the ‘Great Resignation’ phenomenon. In response, we launched various leadership and human capital interventions to better engage and retain our top talent. This is an ongoing process of investment in our people.

We hire candidates from diverse backgrounds who have appropriate skills; have a questioning mindset and intellectual curiosity; and who demonstrate courage and integrity. Diversity is good for our performance and creates value for our clients.

Find out more about transformation, diversity and inclusion.

 

Coaching and development

As we experience a fundamental transformation in the way we work, we continue to invest in our people by providing ongoing professional and personal development and training.

Our Assurance training programmes are designed to support our staff and partners to continuously develop the technical, digital, and business skills they need to be high-performing professionals. During the year we delivered training on a range of topics, including assurance methodology, accounting, risk and quality, technology enablement, digital and business skills. We also flexed our delivery model, opting for shorter and more regular updates delivered using technology. This allowed us to reach our people who were on hybrid working arrangements and subject to COVID-19 restrictions. 

To supplement our extensive global Assurance curricula, we developed more than 100 hours of local training. These programmes have been rated highly by participants and well attended. This resulted in an increase in average training hours in Assurance of more than 25% from the prior year. Overall, Assurance staff completed 299,500 hours of training in FY21, which equated to an average of 90 hours per person.

All our Assurance partners and directors were reskilled in coaching during the year. We implemented a ‘Coaching Lounge’ programme, where coaches were refreshed on the principles of performance coaching. As a practice, we set aside dedicated time for coaching every day and encourage our staff to seek coaching when they are not sure of things. The goal is to develop their professional acumen and avoid mistakes or time-wasting.

In the coming year, we will concentrate our efforts on retaining top talent, improving employee engagement, proactive performance management, accelerating digital skills, and achieving our transformation and inclusion targets.

Read more about transformation, diversity and inclusion, how we inspire our people, and digital transformation.

 

Greater societal purpose

As the COVID-19 pandemic continued in FY21, securing the well-being of our people, protecting the sustainability of the firm, and protecting jobs all remained key priorities. To support others, our partners and staff donated substantial amounts to feeding schemes to support communities in distress.

Assurance partners and staff donated personal time to participate in educational and mentoring programmes to support the development of underprivileged children in communities. We are particularly proud of our efforts at the Ivory Park Primary School in FY21.

Read more about how we’re living our societal purpose, and responding to COVID-19.

 

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 Rianté Padayachee

Rianté Padayachee

Media and Communications Specialist, PwC South Africa

Tel: +27 (0) 11 797 5727

Verena Koobair

Verena Koobair

Integrated Content Lead, PwC South Africa

Tel: +27 (0) 11 797 4873

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