THE LEGAL REGULATION OF THE
EXTERNAL COMPANY AUDITOR
IN POST-ENRON SOUTH AFRICA

Hannine Drake

THESIS PRESENTED IN FULFILMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF
LAWS AT THE UNIVERSITY OF STELLENBOSCH

Supervisor: Prof A.H. van Wyk

March 2009

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DECLARATION
By submitting this thesis electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the owner of the copyright thereof (unless to the extent explicitly otherwise stated) and that I have not previously in its entirety or in part submitted it for obtaining any qualification.

Date: 25 February 2009

Copyright © 2009 Stellenbosch University
All rights reserved

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ACKNOWLEDGEMENTS

In acknowledgement to all who have contributed to this work in some form: writing this thesis would have otherwise been like swimming through mud. To my supervisor,
Professor Andreas van Wyk, thank you for your leadership, patience, and academic skill in guiding me through the research process. To Adéle Mulder and Charl Marais, thank you for your continuous insight and perspectives, both academic and otherwise.
And finally to Hilda and Gerrie Steyn, who have been absolutely crucial throughout all my years of study, thank you for your indispensable support, in all its forms.

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SUMMARY

The worldwide increase of corporate failures on the scale of Enron and WorldCom has sparked a renewed international trend of corporate governance review. With the external company auditor blamed at least in part for many corporate failures, corporate governance reform also necessitates a review of the statutory regulation of the company auditor. In particular, the lack of auditor independence when auditing clients has been under the legislator’s spotlight. The problems associated with unregulated or poorly regulated auditors are well