South African Airways Faces Audit Dispute Over Ticket Revenue Delays

South African Airways (SA, Johannesburg O.R. Tambo) has revealed a disagreement with South Africa’s Auditor General regarding the accounting treatment of revenue from expired air tickets, which has caused a delay in releasing its audited financial statements for FY23/24. The airline remains optimistic that the audit will be finalized by October.

In a statement, SAA explained that the delay stems from a “variance in the interpretation of accounting standards related to expired ticket revenue.” Despite this issue, the airline’s board is actively working to ensure that the audit for the fiscal year ending March 2024 is completed on schedule.

This disclosure follows a July 26 letter from Maropene Ramokgopa, Minister in The Presidency for Planning, Monitoring and Evaluation, to the Speaker of Parliament. Ramokgopa highlighted a “dispute that may materially impact the 2023/24 results” and cited challenges in meeting the September 30, 2024, deadline for submitting SAA’s annual report, audited financial statements, and audit reports. She noted that ongoing audits for prior fiscal years have impeded SAA’s ability to implement recommendations intended to improve audit outcomes.

Ramokgopa suggested that delaying the submission of the draft annual financial statements would provide SAA with the opportunity to address these recommendations, potentially leading to a better audit outcome and facilitating future funding efforts.

SAA acknowledged Ramokgopa’s proactive approach in notifying Parliament and stressed the importance of timely publication of its audited financials. The airline emphasized its commitment to legal obligations for transparency and accountability, as well as engagement with external financial stakeholders.

The airline confirmed that its annual financial statements for 2018/19 through 2021/22 were submitted to Parliament in December 2023. Additionally, the external audit for FY22/23, ending March 2023, has been completed.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com