{"id":839956,"date":"2025-10-21T09:00:00","date_gmt":"2025-10-21T07:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=839956"},"modified":"2025-10-20T21:42:15","modified_gmt":"2025-10-20T19:42:15","slug":"eskoms-multi-billion-rand-financial-misstatement","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/839956\/eskoms-multi-billion-rand-financial-misstatement\/","title":{"rendered":"Eskom’s multi-billion-rand financial misstatement"},"content":{"rendered":"\n

Eskom\u2019s financial statements received a qualified audit opinion related to R16.3 billion that Eskom reported as \u201csavings from turnaround strategies\u201d.<\/p>\n\n\n\n

Eskom\u2019s financial statements were independently audited by Deloitte and Touche for the 2025 financial year.<\/p>\n\n\n\n

Eskom\u2019s financial statements received a qualified audit opinion from Deloitte and Touche, which means they contain material misstatements.<\/p>\n\n\n\n

In the case of Eskom, the misstatements were related to R16.3 billion that Eskom reported as \u201csavings from turnaround strategies\u201d.<\/p>\n\n\n\n

Deloitte and Touche stated that R2.9 billion, which was reported as savings from ten specific initiatives, was overstated.<\/p>\n\n\n\n

It said that this figure was overstated based on the supporting audit evidence that reflected the actual result.<\/p>\n\n\n\n

Eskom also overstated R3.4 billion of savings, which was related to seven other initiatives due to management applying inappropriate estimates and judgments.<\/p>\n\n\n\n

Eskom further reported R1.4 billion of savings related to \u201ccontract negotiations, once-off purchase orders and standard rate contracts\u201d.<\/p>\n\n\n\n

Deloitte and Touche stated that it could not find sufficient audit evidence that the R1.4 billion savings occurred.<\/p>\n\n\n\n

Deloitte concluded that Eskom overstated its \u201csavings from turnaround initiatives\u201d by R6.3 billion. It could also not find evidence of a further R1.4 billion in savings.<\/p>\n\n\n\n

This means that Eskom potentially overstated its turnaround savings by R7.7 billion, which is unbecoming of a top company.<\/p>\n\n\n\n

Due to these significant and material misstatements, Eskom did not receive a clean audit, and its financials received an independent qualified audit opinion.<\/p>\n\n\n\n

Eskom addressing the qualified audit opinion<\/h2>\n\n\n\n
\"\"<\/a>
Eskom CEO Dan Marokane<\/figcaption><\/figure>\n\n\n\n

Eskom said it received a qualified external audit opinion for its 2025 financial statements due to incomplete or inaccurately maintained records.<\/p>\n\n\n\n

\u201cThese records did not comply with legislative requirements relating to irregular expenditure and losses due to criminal conduct,\u201d it said.<\/p>\n\n\n\n

\u201cIssues raised in the prior year\u2019s audit qualification were not adequately addressed and continued into 2025. Several internal control deficiencies were also highlighted.\u201d<\/p>\n\n\n\n

In December 2024, Eskom has launched a three-year audit recovery programme to achieve the standards required for an unqualified audit opinion.<\/p>\n\n\n\n

The programme is governed by the Audit Recovery Oversight Committee, chaired by the Group Chief Executive (GCE).<\/p>\n\n\n\n

Its primary objective is to restore the integrity of Eskom\u2019s internal control systems, resolve recurring audit findings, and enhance audit preparedness.<\/p>\n\n\n\n

The programme also aims to support unqualified audit outcomes and ensure the timely publication of Eskom\u2019s annual financial statements.<\/p>\n\n\n\n

Key focus areas include strengthening governance frameworks, fostering a culture of accountability, and improving documentation and recordkeeping.<\/p>\n\n\n\n

The power utility is also enhancing compliance with internal controls across critical business processes.<\/p>\n\n\n\n

Eskom is also investing in digital systems and tools, while building specialist capacity across finance, assurance, and other oversight functions.<\/p>\n\n\n\n

\u201cDespite being launched with only three months remaining in FY2025, the programme has already shown tangible results,\u201d Eskom said.<\/p>\n\n\n\n

\u201cApproximately 90% of external audit findings raised since FY2021 have been addressed, pending audit verification.\u201d<\/p>\n\n\n\n

To further strengthen its ability to proactively address integrity risks, Eskom established the Group Investigations and Security Unit.<\/p>\n\n\n\n

This unit works in close coordination with the Ethics Office and Internal Audit to ensure a unified and robust response to incidents of crime, fraud, and corruption.<\/p>\n\n\n\n

Eskom has strengthened its financial capacity by onboarding additional finance professionals in key areas of the business.<\/p>\n\n\n\n

\u201cWith foundational elements now in place, management is optimistic about achieving an unqualified audit opinion,\u201d it said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Eskom\u2019s financial statements received a qualified audit opinion related to R16.3 billion that Eskom reported as \u201csavings from turnaround strategies\u201d.<\/p>\n","protected":false},"author":10,"featured_media":779405,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1588,1164],"class_list":["post-839956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-deloitte-and-touche","tag-eskom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=839956"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839956\/revisions"}],"predecessor-version":[{"id":839957,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/839956\/revisions\/839957"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/779405"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=839956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=839956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=839956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}