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Top Zimbabwean auditor Phibeon Gwatidzo says auditors are not solely to blame for most scandals that result in most company collapses because they are not involved in the day-to-day management of their clients’ businesses.
Gwatidzo (PG), who is the chairman of Baker Till Central Africa, shared his thoughts on the auditing profession on the platform In Conversation with Trevor, which is hosted by Alpha Media Holdings chairman Trevor Ncube.
Below are excerpts from the interview.
TN: Phibion Gwatidzo, welcome to In Conversation With Trevor.
PG: Thank you Trevor. Thank you for having me on the show.
TN: It has been long in coming my brother, it has been long in coming.
So excited to have you here.
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There are so many beautiful parts of your life that I want us to share with our audience out there.
First of all, I am always fascinated when I get people like you who are into these disciplines that are rigid, but are Christians.
Like scientists, like doctors. You are a chartered accountant. How do you do it?
Why I ask this question is because a lot of people think that for you to be a person of faith you must be a simpleton, simple-minded, you do not have enough intelligence to push back towards/against faith.
How do you reconcile that you are a chartered accountant, but you are a man of faith? Are these two reconcilable?
PG: I would think so Trevor. First of all, to say, I am what I am by the grace of God.
TN: Amen.
PG: So I recognise that apart from God I am nothing. And so I cannot separate my faith in him from my vocation.
I think I have got my vocation because of God, and so I see my being a chartered accountant, my running you know practice as a ministry that is an area God has put me in to serve in.
So I think they are one and the same thing. I do not see them as separate things.
TN: I will push back and say some would say, and I hear this a number of times, are you not minimising your own efforts and ascribing it all to God?
Have you not worked enough to deserve being what you are? What is your response to that?
PG: I think I have worked, but I tend to think that you know He enabled me to work.
Trevor, I was nothing when I grew up. I grew up without a father, my father turned away from me when I was too young to know.
I was in the village. I think I was destined to be nothing, and how God turned that life from a nothing to a life of significance is amazing.
And so whereas I work hard as if everything depends on me, I depend on God so much as if everything depends on God.
TN: That is powerful. I would want us to go to your upbringing.
I mean, you have just touched me, your father turned away before you knew him, when you were young.
I want us to revisit that place. But, at the moment you are a father of two yourself.
PG: Correct.
TN: With four grandchildren. I go [to] that because I always get excited when I talk to my friends, who have got grandchildren.
What is it like to be a grandfather? It means you are too old?
PG: Well, yes. I mean it means you are old. Sometimes you need to have grandchildren to be reminded that you are old, because normally your mind is acting as if you are still young.
TN: Yeah.
PG: You know but what a blessing it is. I mean I love my grandchildren. I love holding them, and I see the goodness of God in them, what a blessing you know, to be able to hold them in my hands while I am still alive. And it is a fulfilment of what I said to myself when I was young.
I said to myself if I ever get married I want to do better than my father.
I want to see my children grow, and I want to be able to see my grandchildren while we are together. And God has enabled me to be able to do that.
TN: Beautiful. Somebody said jokingly, you know it is so beautiful having grandchildren, sometimes it is so beautiful I wish I could just have grandchildren without the children!
PG: Oh yes!
TN: Hahahaha. Unpack that for me? What does that mean?
PG: Well look, I think grandchildren are so fun to me.
As if they cannot do anything wrong.
My children, are difficult to bring up because I guess with children you are strict, you want them to turn [out] a specific way. With grandchildren, everything they do...
TN: Is okay.
PG: Yeah. You know so there is no tension there, there is no animosity there. You know things just flow.
TN: At the end of the day you can push them back to their parents?
PG: Yeah, of course yes. But it is as if they believe that you can do anything. Whereas your children sometimes it is as if you cannot do anything right yeah.
TN: Wow. Beautiful. You have been married for 34 years?
For those out there at home starting their journey in marriage, for those who are facing the storms that come with being in a marriage, what's been the trick of being married for 34 years?
PG: I think it is a commitment.
TN: Commitment.
PG: Commitment. And yeah, I think there is a need for you to commit to something.
TN: Can I just press you there? What does commitment look like? What does it mean?
PG: I think commitment to me means that whatever is going to happen along the way I have made a decision that I am going to stick to.
I think that is what has enabled me to be married for 34 years. It is not about performance, it is not about the good things or the bad things.
TN: It is not about what you feel like?
PG: It is not about what you feel. It is about the commitment that you have made, to that relationship and to that person. And then you are saying I am in this.
TN: The d-word does not exist?
PG: That is right. But, it does happen sometimes, but when you are committed you are prepared to say I want this to work, I am in this to work.
So, for me sometimes it means that I am the first one to seek reconciliation when things go wrong in marriage, because I want it to last.
TN: Okay, so commitment. What other ingredient comes?
PG: I think hard work. I think you know marriage involves work.
It involves being prepared to talk, it involves being able to have the tough conversations, but it also involves resolving conflicts, being prepared to resolve.
Because conflict does happen, and people get divorced because of conflict, but then we do not want to take time to sit down and resolve conflict.
Now resolving conflict means you are going to talk about it, you figure out what has gone wrong, and then you say what needs to happen to prevent this going wrong again.
And I think I have got friends, it is good to have friends who are likeminded, friends who want also to be successful in what you are doing.
TN: So, Phibion you are chairman of Baker Tilly Central Africa, the Middle East and Africa region. That is a huge responsibility?
PG: It is Trevor. I agree. So, Baker Tilly Central Africa, it is four countries: Zimbabwe, Botswana, Zambia and Malawi.
That is actually my business, that is where I am operating, starting off in Zimbabwe and then going to these other four countries.
And then you have got Baker Tilly Africa, as you know it, but what we have also just done is to come up with Baker Tilly Middle East & Africa as a council.
Before we used to be MEIA, which is Europe, Middle East and Africa, but we have set Africa and Middle East apart, and so I chair that council as well. So it is one thing dovetailing into another.
TN: How big is it in terms of staff? And what is your clientele like? Do you have a certain clientele that you go for?
PG: We serve largely in owner managed businesses. So Baker Tilly kind of like focuses on small to medium-sized enterprises.
You have got other offices that are beginning to serve very large entities, but primarily we are in the middle market there. That is where we want to target.
TN: Why that middle market? Is that deliberate?
PG: I think it is deliberate because we think that is a space perhaps that is not being well served by the big four and others, and there is a niche there that we go for yes.
TN: Okay. And in terms of staff? How big is this operation that you preside over as chairman?
PG: Baker Tilly Central Africa is where I guess we talk about, I think we have got over 250 staff.
TN: Professionals.
PG: Over 250 professionals yes. In Baker Tilly Africa I think we exceed a thousand staff.
TN: Wow.
PG: Yeah.
TN: That is big.
PG: It is big.
TN: That is big. You also chair the professional standards committee, and I want to put you on the spot here because there have been a number of times where auditors get blamed for when things go wrong.
For instance, the Gupta brothers scandal in South Africa.
The auditors got a lot of criticism, and just this week uh Marcus Jooste, who used to be one of the biggest entrepreneurs in South Africa, committed suicide.
And a lot of people are saying stuff that happened in his business, which became a global business should not have happened if the auditors were looking over what he was doing.
You, as chairman of the professional standards committee of Baker Tilly, what would be your response? Should auditors notice some of these goings on early on and blow the whistle?
PG: Yes and no. Okay. So, you are right, I chair the professional standards committee of Baker Tilly International, so that is worldwide. Is it the fault of the auditor?
I think my first answer will be no, because the auditor's responsibility is to check and confirm what management and the board are putting before the auditor.
So there are people who have got a day-to-day in-depth responsibility for a company, and those people are the board of directors.
The auditor comes at the end of the event yeah, maybe once a year to come and check and confirm.
But, granted that there are sometimes auditors, when you know there is carelessness, there is a lack of attention to detail which then sometimes results, and perhaps there is greed which then results in these scandals coming up.
TN: Do you not think that sometimes the auditors, I mean I am not an auditor so I might be speaking out of turn here, that there is a tendency for auditors to tick boxes without looking deeply into issues, without asking questions?
I mean talking for instance of the Gupta’s, and uh Marcus Jooste, and many other scandals, Enron for instance.
PG: Auditors are very well-trained people, very thoroughly trained. That training includes both theory and practice.
So effectively an auditor is a person who knows what they should be doing, they are not ticking boxes.
They know how to analyse things, they know how to dig deep into issues, and in most cases where we end up with scandals or failures, the auditor has chosen to be compromised.
- “In Conversation With Trevor” is a weekly show broadcast on YouTube.com//InConversationWithTrevor.