Authored by: Ragiema Thokan-Mahomed, Legal, Ethics and Compliance Executive at the South African Institute of Professional Accountants (SAIPA)

Recently, the South African Institute of Professional Accountants (SAIPA) signed a groundbreaking memorandum of understanding with five other professional bodies to effectively close a loophole that allowed professionals with multiple memberships to evade the consequences of misconduct.

The other signatories to the memorandum include the Institute of Internal Auditors SA (IIA SA), the Institute of Risk Management SA (IRMSA), Chartered Secretaries Southern Africa (CSSA), the Institute of Directors in Southern Africa (IoDSA), and the Association of Certified Fraud Examiners (ACFE). Together, these organisations represent over 44,000 of South Africa’s company directors, company secretaries, internal auditors, accountants, fraud examiners and risk management professionals.

In the wake of revelations of corruption in government and business since last year, complaints against professional accountants have increased by 150%. This is understandable as the public has become acutely aware of the impact of corruption and are more likely to investigate courses of action available to them. This is true not just of accountants but many professionals in positions of authority, including business directors, company secretaries, corporate investigators or managers.
 
An integrated disciplinary solution
One means of resolution is to approach their professional body, which typically implements an investigative and disciplinary process based on internationally prescribed standards. SAIPA, for example, adheres to the framework of the International Federation of Accountants (IFAC), of which it is a voting member. 

However, as a result of specialisation, many professionals belong to several associations, therefore holding more than one professional designation. In the past, if they were expelled from a particular association for misconduct, they could continue practicing under an alternative designation, thereby evading the full consequences of their actions. Now, those days are over.

In terms of the agreement, if a complaint is received against a professional who holds designations associated with several of the signatories, the relevant professional bodies will take a unified approach to investigate and resolve the charge. A lead investigator shall be nominated from among the parties and the final judgement shall be binding across all participating bodies in as far as their codes of conduct determine.

Swift justice
The goal is that such cases will be addressed more swiftly, efficiently and cost effectively but, most importantly, that their effect will be complete and justice will be rightly served, all in the interest of the public. 

This is yet another step SAIPA has taken to combat non-compliance with laws and regulations (NOCLAR) in its efforts to restore faith in the accounting profession and protect the public interest. The implications of this initiative are profound, promising a unified front against corruption by putting the very careers of wrongdoers at risk. It is also a valuable extension to SAIPA’s own rules that require the names of members struck from its roll to be made public and a letter of good standing to be obtained for applicants already associated with another body.

Better legislation required
Yet, more needs to be done. Currently, no legal constraints exist to practicing accounting. Anyone, regardless of qualification or intent, can hang out their shingle and call themselves an “accountant” or, for those who presume to know better, “a professional accountant”. As a result, there is no way to estimate how many accountants there actually are in South Africa or the magnitude to which these unregulated practitioners contribute to NOCLAR. This is a grave injustice to the reputation of the profession and the public interest.

It is critical that new laws are promptly enacted to compel anyone practicing accounting to join an appropriate professional body, like SAIPA. SARS already enforces such a requirement to ensure that tax practitioners are suitably qualified and professionally traceable, thereby protecting taxpayers from harm. Demanding the same of accountants should be a standard condition.

Right now, it is left to organisations to decide if they will risk hiring or doing business with unregulated accountants, and forego the assurances provided by a professional designation, like Professional Accountant (SA), and the protection offered by initiatives like the collaborative agreement mentioned above. SAIPA’s designation is backed by a prescribed study path, a three-year practical learnership, a Professional Evaluation of applied competence and ethics appreciation, a strict code of conduct and disciplinary process, and continuous professional development programmes (CPD). All that is missing is sweeping legislation to ensure that South Africa enters a new era of ethical accounting.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@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: Zobuzwe Ngobese, Executive: Marketing & Business Development at the South African Institute of Professional Accountants (SAIPA)

It’s one thing to study accountancy at university, even with practical exercises. It’s quite another to practice as a professional accountant every day in the real world of business. A conscientious graduate will acknowledge the need to transform their education into polished competency before taking on complex accounting duties in earnest. This means getting practical training under the mentorship of senior accountants so one’s lack of experience does not jeopardise the public interest or tarnish the profession.

Experience is not enough
Just finding a position in a company and starting work won’t produce the desired results. Many organisations, especially smaller ones, only implement simple accounting records or part of the full scope of financial responsibilities. However, a SAIPA Accredited Training Centre (ATC) is a real business that follows SAIPA’s learnership guidelines to ensure a graduate gains work experience across a wide range of financial concerns. In this environment, they can work under the watchful eye of experienced accountants who will identify any mistakes they make and guide them in the right direction. 

During their learnership period, trainees complete 214 practical modules relating to unique accounting skills in every business area. They record these in SAIPA’s online electronic logbook, a first for the industry, which is moderated by the Institute. In addition, SAIPA assessors visit the ATC to evaluate trainees’ progress. 

Once learners complete all the modules, SAIPA issues them and the ATC with a letter of completion and forwards their results to the Finance and Accounting Services Sector Education and Training Authority (FASSET). FASSET then awards them a certificate of competence and their achievement is registered in the South African Qualifications Authority (SAQA) National Learners’ Records Database.

In this way, graduates can be molded into fully-fledged professional accountants with the correct mindset and complete complement of skills needed in business.

More than training
The ATC is a very different setting from university. Its main goal is not learning but productivity - getting things done efficiently to be profitable. Working in such an environment will equip trainees with know-how that cannot be taught in academia because of this unique dynamic. Apart from essential work experience, trainee accountants will acquire additional capabilities they can leverage throughout their careers. 

These include becoming acclimated to the culture of the financial department, learning to work as a member of a team with interrelated responsibilities, and learning to operate systematically as part of a larger process. Other soft skills, like presentation and speaking, emotional intelligence, listening and observing, understanding requirements, reporting, conflict resolution and business writing, will also be gained. And each discreet quality contributes to grooming the ideal professional accountant.

Professional designation
Most accountants sooner or later realise the benefits of holding a professional designation, like SAIPA’s Professional Accountant (SA). It’s trusted by organisations because of the strict conditions placed by the Institute on its members’ competency and conduct, which inevitably protects the profession’s end users from poor service. Such a recognised and well-regarded qualification can open doors to career advancement for employees or business opportunities for private practitioners. However, before one can even apply for the designation, they must complete their three-year learnership at a SAIPA ATC.

Becoming a trainee accountant
Because ATCs are actual businesses with specific workforce needs, SAIPA never tries to influence the recruitment process. A graduate must apply for a position as they would with any other company. This means submitting a professionally drafted CV and presenting oneself confidently at interviews.

SAIPA Student Members do have some advantages over other candidates. Firstly, ATCs may notify SAIPA of vacancies for learners, which we post online in our student membership area. In addition, SAIPA will advertise on our website that a student member is seeking placement. ATC recruiters often check these notices and may contact that member before sourcing candidates elsewhere.

Practicing at a higher level
Becoming a real professional accountant is about more than getting a job. The earnest practitioner strives for excellence in service and aspires to the highest ethical standards from the get-go. So completing a three-year learnership at an ATC sets the pace for everything that follows. It fosters competency and clears the way to a professional designation. After that, the sky’s the limit. Therefore, those currently in university should be sure to plan for their learnership. There’s a list of ATCs on SAIPA’s website as well as instructions on how to become a SAIPA Student Member.

Becoming an ATC
SAIPA is also eager to partner with more organisations that can offer a broad spectrum of accounting experience to recent graduates. This will help the Institute bolster its ranks of proficient accountants who will serve our growing economy’s future needs. It’s a great way to demonstrate one’s commitment to the profession and contribute to its advancement. If you would like to know more about becoming a SAIPA ATC, please contact us through our website.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@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

Authored by: Faith Ngwenya, spokesperson of the South African Institute of Professional Accountants (SAIPA)

A recent trend that has emerged in South African businesses shutting their doors is to opt for the path of business rescue, as opposed to liquidation. While many believe that a business rescue process is only implemented to stall a liquidation, thereby also frustrating the creditors of a company, this is not the case.

Business rescue, which is a process of rehabilitating a business that is in financial distress by providing temporary supervision and management by a business rescue practitioner, should not be used as means to stall the liquidation process. Business rescue aims to provide the business entity an opportunity to reorganise and restructure its affairs, while having the protection of the law against any legal proceedings. 

It is possible that at the time of applying for business rescue it seemed as the best solution to address the financial distress of the entity; however, in many instances, after initiating the rescue, it can become obvious that the prospects of a successful rescue are slim. The business rescue practitioner then moves to terminate the rescue and applies for liquidation. This way it will save the assets of the entity from further being depleted.

Business Rescue step by step
Once a company commences business rescue proceedings either voluntarily (section 129) or by an order of court (on application by an affected person) the following actions are prescribed by the act:

The registered business rescue practitioner must be approached to investigate the affairs of the company as soon as possible after the start of business rescue.

Within ten business days after being appointed, the practitioner must convene a meeting of the creditors and a meeting of the employees and advise them of the prospects of rescuing the company.

The business rescue plan, as proposed by the practitioner, must be published by the company within 25 days after the date on which the business rescue practitioner was appointed. The business rescue practitioner must then convene a meeting of the creditors and any other holders of a voting interest, for considering the proposed plan, within ten business days of the publication of the business rescue plan.

Last year, the Companies and Intellectual Property Commission (CIPC) accredited the South African Institute of Professional Accountants (SAIPA) to regulate its members that are eligible to be business rescue practitioners in line with Companies Act. This forms part of a broader plan to regulate the business rescue sector and only SAIPA members in good standing can be licensed as Business Rescue Practitioners as from the beginning of 2017.

How does it affect creditors?
Under the supervision of the business rescue practitioner, creditors need to comply with their obligations to supply goods or services to the company in the same way they did prior to the commencement of business rescue proceedings, unless the agreement between the company and the creditor regulates the relationship between the parties in the event of an insolvency or business rescue.

However, it is understandable that unsecured creditors and lenders during business rescue would be wary of continuing to service or supply goods to the company on the same basis on which they did prior to a business rescue as their claims will be satisfied last in accordance with the order of preference for the payment of claims prescribed by the act.

Going, going, gone
Liquidation, which is the dissolving of a business entity by realising its assets and liabilities and distributing the net proceeds if any to the shareholders, can be set about by a voluntary application. The trigger for a liquidation is the moment liabilities of the business exceed its assets, the business is insolvent and must stop trading. The first step is to decide on a date for the last day of trading. Any income derived after this date will be for the benefit of the insolvent estate and thus the creditors. 

The application is submitted to the High Court of South Africa and the court supplies a case number, which is delivered to the business’ registered address. The provisional application court date is set and the application is brought by the applicant on a semi-urgent basis. The application entails immediate relief granted by the court, which means that the creditors don’t receive notice of the application first. The court grants the provisional order and postpones the matter to ensure that creditors receive notification, with the exception of the South African Revenue Service, who receives notification of the application before the set court date.

The provisional order is important, as once it has been granted, no creditor can take any steps to recover debt from the business. The matter is postponed for a period of 30 days and during this period, notice is sent to all relevant parties, giving them time to oppose the liquidation application before the court return date. If no opposition is lodged during this period, the court grants the final liquidation order and the business entity is liquidated. If there is opposition, the relevant party must submit an affidavit detailing the reasons for opposing the application and a trial may follow.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@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