PwC tells SCOPA it played no role in advising RAF to change its accounting standard

Auditing firm, PricewaterhouseCoopers (PwC), insists it played no role in advising the Road Accident Fund (RAF) to change its accounting standard, which has been ruled invalid by the high court.

A partner at the firm, Johan van Huyssteen, delivered brief testimony to Parliament’s Standing Committee on Public Accounts (SCOPA) on Tuesday, saying the firm believed the decision had already been taken by the board once PwC was hired to advise on its implementation.

By changing its accounting standard, the RAF has been able to dramatically reduce its contingent liabilities on paper because it does not recognise thousands of claims for which a settlement offer has not yet been made.

Van Huyssteen has told SCOPA's inquiry into maladministration at the RAF that he was not the one who engaged with the fund in 2021 when it requested a quotation and subsequently hired PricewaterhouseCoopers at a cost of almost R800,000 two weeks later.

Committee chairperson Songezo Zibi was suspicious of the timeline of events, while Van Huyssteen struggled to produce evidence of howPwC ascertained the board had approved the change in accounting policy before it was hired.

"PwC was actually not required at all in making that decision or in the decision to apply IPSAS 42."

Van Huyssteen said that at the time PwC was contracted, the IPSAS 42 policy was not prohibited by the Accounting Standards Board.

"We do actually undertake acceptance considerations prior to engaging in a specific piece of work."

MPs felt Van Huyssteen was not the right person to answer their questions and that he was being assisted too much by the attorneys who accompanied him.

The committee said it would now aim to obtain evidence from the former PwC partner who dealt directly with the matter, but who has since retired.