The Independent Regulatory Board for Auditors (IRBA) has expressed regret over South Africa’s dramatic decline in rankings for auditing standards.

The World Economic Forum’s (WEF) Global Competitiveness Report 2017-2018 released on Wednesday showed South Africa lost the number one spot it held for the past seven years. South Africa was now ranked number 30 in the strength of reporting and auditing standards.

IRBA chief executive, Bernard Agulhas, said in a statement on Thursday, that regulatory body was disappointed.

“What this means is that the IRBA and other regulators must work together to correct the situation, with the support of everyone, so that we can re-establish stability in our capital and financial markets,” Agulhas said.

“Confidence in financial markets is dependent on perceptions of how safe it is to do business in a country, and such perceptions are influenced by levels of corruption, crime, downgrades and strength of financial institutions.”

Overall, South Africa’s performance in the WEF Global Competitiveness Index slipped 14 places down from number 47. South Africa was ranked 61 out of 137 economies assessed in the annual survey conducted between February and June 2017.

IRBA is also conducting an independent investigation into KPMG after the embattled audit firm withdrew its controversial report on the so-called “rogue spy unit” for South African Revenue Services. In April KPMG terminated its business relationship with businesses owned by the controversial Guptas, who are accused of using their proximity to President Jacob Zuma to secure lucrative government tenders.

Agulhas said the drop in confidence in South Africa’s auditing standards affected the country’s potential to attract foreign investment.

“As confidence drops, investment drops and our markets suffer the consequence,” Agulhas said.

“Given that our financial markets and institutional ranking slipped in a number of areas including strength of securities exchange, efficacy of corporate boards, protection of minority shareholders’ interests, decline in strength of investor protection and ethical behaviour of firms, the result is predictable.”

Agulhas said it was “particularly satisfying” that citizens and shareholders were reacting to corruption and irregular activity, and that awareness and shareholder activism had been heightened in the past few months.

“Public outcries on recent issues in the market are merely symptomatic of deeper root causes which our country must address,” Agulhas said.

“Our institutional pillars must be continuously strengthened, and as the importance of governance, transparency and ‘doing the right thing’ is again foremost on citizens’ minds, we can all work together to regain confidence in our markets, stimulate investment and reclaim our world class rankings.”