Author: Faith Ngwenya, Technical Executive at the South African Institute of Professional Accountants (SAIPA)
 
Grant Thornton recently published their International Business Report for the third quarter of 2017. Their findings show that South African business executives continue to adopt a “wait and see” approach to business due to political and economic instability in the country.
 
Of the 100 South African business executives who are surveyed for the quarterly report, 72% confirmed that turbulence in the economy over the past six months have affected operations and decisions, 38% were considering investing offshore and 28% were contemplating selling their businesses.
 
The problem with keeping operations stagnant and simply focusing on keeping heads above water is that we’re not solving the problem – we’re perpetuating the problem and adding a steady stream of fuel to a slow burning fire. If everyone adopts a ‘wait and see’ approach, we’re not moving businesses or the economic prosperity of our country forward.
 
But the spotlight on growth and success
As professional accountants, we have a key role to play in changing the perspective of business owners and this can be achieved in a number of ways. At SAIPA, we’re encouraging clients to dig deep into the financial histories of their clients so that a spotlight can be put on what they have been able to achieve amidst tough turbulent times, economic downturns, and setbacks that have affected their industry or business specifically.
 
Many times, despite barriers, hurdles and challenges, businesses have been able to show positive growth. These are the things that your clients need to be reminded of and as an accountant, you should be drawing their attention to their successes and achievements.
 
Besides being the opposite of a doomsayer and essentially becoming nothing short of a cheerleader for your client’s business mission and goals, you can also highlight viable investment opportunities within our own borders. Money can be made by investing overseas, but there’s also money to be made by investing in South African investment opportunities.
 
Research investment opportunities that would appeal to your clients and that would align with their business operations, interests and industries to show them how they can benefit themselves as well as inject money into South African opportunities. Economic upliftment and sustainable development starts at home and if your clients are taking their wealth, jobs and businesses overseas, then it has a butterfly effect that negatively impact many South African citizens, their families, and the economy.
 
South Africa is still a major driver in the global economy
It’s also important to look at different economic indexes that can give your clients a better, broader perspective. Instead of waiting for the results of upcoming political events, which is essentially a short-sighted approach, delve into the indexes that are painting a much brighter picture. When compared to other BRICS, South Africa has become a major driver in the global economy and a force for change in the developing world. Context is key.
 
As accountants, we also need to do our part in making foreign investment in South Africa more attractive. Many businesses want to start operations in South Africa for myriad reasons, ranging from our natural resources to our proximity to booming African markets. One of the things that is holding them back is cumbersome legislation.
 
Our employment regulations are seen as a huge barrier to entry in the country and this is something that Government needs to carefully rethink. In September 2017, the World Economic Forum announced that South Africa had slipped down 14 positions in the World Economic Forum Global Competitive Index and restrictive labour regulations were cited as one of the reasons for this.
 
South Africa’s unemployment rate is high and it is disturbing. Accountants need to join forces with the appropriate unions and challenge these legislations so that we can make it easier and more attractive for companies to invest in our country; the natural result will be more employment opportunities for our people.
 
In conclusion, your clients need to be made aware of what they’ve been able to achieve despite economic situations that are far outside their realm of control. Show them how they have continued to grow, what they could be doing better, which areas of their business they should be investing in to drive growth and how a big-picture mentality and positive outlook can help them continue to grow.
 
ENDS
 
MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za 
 
For more information on SAIPA please visit:
Website: www.saipa.co.za
Twitter: @SAIPAcomms
LinkedIn: South African institute of Professional Accountants Company
Facebook: South African Institute of Professional Accountants

Author: Bongani Coka, CE of the South African Institute of Professional Accountants (SAIPA)
 
A good reputation is hard to build, but can be destroyed overnight. This is particularly true of the accountancy and audit profession, which lives off its credibility. Distrust has recently become a major issue, especially with the recent public backlash experienced by politically implicated persons in the accounting profession.
 
Accountants need to keep in mind that establishing trust requires more than just honesty: it requires the ability to practice sound moral values. Major drivers of trust are openness, competence, benevolence and integrity.
 
Openness
The quality of ‘openness’ has a distinct ethical undertone as the disclosure of information can assist those who are affected by the information to either advance or protect their interests.
 
Failure to disclose such information effectively bars those affected by it from enhancing or protecting their interests. Consequently, a lack of openness on the side of a professional accountant will be perceived as unfair or unethical by their clients and other key stakeholders, which in turn will undermine public perceptions of the trustworthiness of the professionals.
 
Competence
Due to the recent spate of scandals, the South African public now question accountants’ ability to act in a manner consistent with the code of ethics for accountants and their competency to provide a quality service with the required skill.
 
A professional accountant may not mislead his employer or client as to his level of expertise or experience. Where appropriate, clients or employers must be notified of any limitations that the professional accountant may have.
 
In addition, Section 130 of the Code of Ethics for Professional Accountants requires a professional accountant to maintain professional knowledge and skill at a level required to ensure that a client or employer receives a competent professional service based on current developments in practice, legislation and techniques; and act diligently and in accordance with the applicable technical and professional standards.
 
Professional accountants are expected to employ an inquiring mind to their work founded on the basis of their knowledge of the organisations’ financials. Their training in accounting enables them to adopt a pragmatic and objective approach to solving issues. Using their skills and intimate understanding of the organisation and the environment in which it operates, professional accountants in business must ask challenging questions.
 
They are also the front runners when it comes to upholding the quality of financial reporting and providing the broader public with reliable financial information.  Regardless of the level of assurance, the public assume that due diligence was taken into account when the professional accountant compiled the financial statements.
 
Benevolence
Trust for a professional accountant’s client involves having confidence that they will act in their best interest or refrain from taking advantage of them. The possibility that they might break this confidence introduces the element of risk, with a dash of fear and anxiety peppered into the mix.
 
The greater the perceived risk, the harder it may be for the client to trust their accountant.
 
Any debacle in the accounting profession raises the question of ethical behaviour and shines the spotlight on the responsibility of the professional accountant to maintain the balance between serving the public interest and that of their client.
 
Professional Accounting Organisations (PAO) accredited by the International Federation of Accountants (IFAC) must be pro-active in their approach to any matter that may bring their institutes into disrepute as a result of the conduct of their members.
 
Random checks and balances must be conducted on PAO members to ensure that they remain in good standing and a PAO should encourage the public to lay a complaint for investigation should they experience misconduct or unprofessional behaviour from any PAO member.
 
Integrity
The link between integrity and ethics is so intimate that the two concepts are often used as synonyms.
 
In terms of section 110 of the Code of Ethics for Professional Accountants, obligation is imposed on all professional accountants to be straightforward and honest in all professional and business relationships. Integrity also implies fair dealings and truthfulness.

In conclusion, gaining clients and public trust by a professional accountant requires openness, having the competence and consideration of what clients say is important to them, and making sure they provide that to the satisfaction of a client in an ethical manner.

Trustworthiness is within our sphere of control, and consequently it is something that can be deliberately changed or cultivated. As a profession we are impacted by trust, let us try to restore it.
 
Photo caption: Bongani Coka
​
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za  
 
For more information on SAIPA please visit:
Website: www.saipa.co.za
Twitter: @SAIPAcomms
LinkedIn: South African institute of Professional Accountants Company
Facebook: South African Institute of Professional Accountants

Author: Ragiema Thokan-Mahomed. Legal, Ethics and Compliance Executive, South African Institute of Professional Accountants (SAIPA)
 
The 12th to 18th of November is International Fraud Awareness Week, an initiative established to educate the public on the threat of fraud and ways of combating it. It’s therefore a good time for professional accountants and business people alike to take pause and consider what role they can play in driving fraud from the market.

New NOCLAR standard
However, fraud is only one element of corruption. A bigger war is being waged against what has become known in the accounting industry as NOCLAR (Non-Compliance with Laws and Regulations). The threat is so real that the International Ethics Standards Board for Accountants (IESBA) created a new standard called Responding to Non-Compliance with Laws and Regulations to address the issue.
 
The standard, which became effective on 15 July 2017 and is the result of six years of labour, will be integrated into the organisation’s globally-recognised Handbook of the Code of Ethics for Professional Accountants. Several existing clauses in the Code have been amended to accommodate its provisions.

Memorandum of understanding
In light of such developments, the South African Institute of Professional Accountants (SAIPA), in collaboration with other regulating bodies for the accounting industry, is working to develop a memorandum of understanding to enable greater cooperation between these parties to fight NOCLAR. As one of the few internationally recognised professional accountancy organisations, SAIPA has taken the lead in pioneering a solution that will work for everyone.
 
While the final terms of the memorandum must still be established, several suggestions have been put forward. For example, member information of each body is and always will be protected as required by law and will never be shared between them. However, where members have been found guilty of gross misconduct related to NOCLAR or any deviant behaviour within their professional body, we look to acknowledge the recommendation of participating Institutes and act as guardians for the profession to keep unethical practitioners out.
 
This record will be available to other regulators, allowing them to determine if an applicant for their own designation is still in fact associated with that professional body. This would be an effective response in cases where, for instance, a discredited accountant attempts to carry on business under an alternative designation or uses a deceased practitioner’s membership number as their own.
 
It will also be important to investigate the principles and processes each body applies to combat corruption within its ranks. Where these are determined to be sound, consensus will be sought on how to make them universally applicable or to adapt them for the collective good.
 
SAIPA believes that cooperation and communication between regulators is the only way to provide robust defense against NOCLAR and promote the main goal of the Code of Ethics, which is always to protect the public interest. This interest extends to upstanding accountants who adhere to the principles of ethical conduct, organisations and individuals who administer their affairs honestly, and the reputation of the profession itself. It is in this spirit that the memorandum will be drawn up and made effective.

The accountant’s role
It’s also vital that professional accountants know and understand the Responding to Non-Compliance with Laws and Regulations standard, which was developed for three reasons. Firstly, it makes provision for disclosing potential NOCLAR to public authorities, where appropriate, without breaching client confidentiality.
 
Secondly, it arms the accountant with better alternatives than simply resigning from a matter without NOCLAR issues being resolved. Thirdly, it provides direct guidance on how to respond to potential NOCLAR in various contexts, allowing the practitioner to act with confidence when approaching these difficult situations.
 
While the standard was created to enhance ethical conduct, and offer protection to stakeholders and the general public, it also gives the professional accountant the freedom to play a significant role in the global fight against NOCLAR. It is therefore the duty of all practitioners to know what steps to follow and when to act if corruption is detected, and SAIPA encourages them to familiarise themselves with its requirements.
 
The concerted and cooperative efforts of the various professional bodies in South Africa and guidance provided by the new standard will provide a robust defence against NOCLAR. It is SAIPA’s vision that, by working together, we will hold the name of the profession high and continue to fulfil our obligation to the public good.
 
Photo caption: Ragiema Thokan-Mahomed

​ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za 
 
For more information on SAIPA please visit:
Website: www.saipa.co.za
Twitter: @SAIPAcomms
LinkedIn: South African institute of Professional Accountants Company
Facebook: South African Institute of Professional Accountants