Auditor-General Drops Crowe Over Disclosure Failure
The South African Auditor-General has terminated its contract with Crowe after the firm failed to disclose a regulatory fine.
Updated on Oct. 23, 2026 in Financial Crime
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The Auditor-General of South Africa has ended its contract with the audit firm Crowe following the discovery that the company withheld information regarding a regulatory sanction against its lead partner, Gary Kartsounis. An audit committee noted that the failure to disclose the fine created concerns about professional reputation and audit quality.
Why it matters
The decision follows an investigation by PwC, which identified double-counting in a valuation of Lanseria Airport conducted by the firm. This move aims to protect the integrity of the institution's financial accounts after oversight committees flagged significant inconsistencies.
The Independent Regulatory Board for Auditors fined lead partner Gary Kartsounis R400,000 in March 2026. The Auditor-General is currently seeking a new external auditor to be approved by Parliament by November 2026.
The players
Gary Kartsounis
He is the lead partner at the audit firm Crowe who was fined R400,000 by the Independent Regulatory Board for Auditors.
Crowe
This is an external audit firm that served the Auditor-General of South Africa until its contract was terminated in October 2026.
PwC
This professional services firm was commissioned to review audit files and identified issues regarding valuation experience and methodology.
Public Investment Corporation
This entity is a major investor that requested an investigation into the valuation of assets at Lanseria Airport.
The details
A PwC report revealed that Crowe incorrectly performed a valuation of a 25% stake in Lanseria Airport, which was linked to a defaulted loan of US$36.4 million. While extra checks confirmed the 2026 financial accounts were accurate, the oversight committee moved to replace the firm due to the lack of transparent communication.
Timeline
2013: The Public Investment Corporation lent R333.2 million to Acapulco.
March 2026: The Independent Regulatory Board for Auditors fined lead partner Gary Kartsounis.
20 July 2026: Business Day reported on the regulatory fine.
23 October 2026: The Auditor-General's decision to terminate the contract was reported.
January 2028: The original end date for the contract with Crowe.
Legal Context
The termination follows the rigorous standards set by the Public Finance Management Act's oversight requirements for state-appointed auditors. This action marks a significant enforcement of professional accountability protocols within South African public sector financial auditing.
The change in auditors ensures that state financial accounts are subject to rigorous and transparent review by a firm in good standing. Residents and taxpayers can expect continued parliamentary oversight as the institution transitions to a new service provider to maintain fiscal accountability.
The takeaway
This case highlights the critical importance of transparency and professional disclosure for firms handling state contracts. Organizations should ensure full compliance with regulatory reporting requirements to maintain their standing and avoid contract termination.
What happens next
Parliament's oversight committee must review and approve the appointment of a new external auditor by November 2026.
Further reading
For more information on regulatory oversight, visit the Financial Crime section.
Source note: This article includes information reported by The Rio Times.
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