The South African Institute of Professional Accountants (SAIPA) hosted its second Accounting iNdaba on the 4th and 5th of November.

“The Accounting iNdaba provides a platform to prepare professional accountants for the demands 4IR and other emerging trends will place on the profession over the next decade,” said Shahied Daniels, Chief Executive of SAIPA.

4IR refers to the Fourth Industrial Revolution, that is, the use of new technologies, especially AI-enabled machines and processes, to boost efficiencies in trade and industry.

To be future-ready, accountants need to adapt to this new environment and evolve by gaining additional skills and deepening their knowledge of technological developments. All accountants will need to adjust to stay ahead of the curve. To succeed, they must do this intentionally – by design – in an agreed-upon direction.

The inaugural event, held last year at the Cape Town International Convention Centre, was a resounding success, promising the iNdaba’s regular annual return.

Due to the current pandemic, the function was presented virtually through an online conferencing service.

Theme
The theme of the Accounting iNdaba was Hindsight > Insight > Foresight.

Its purpose is to emphasise the transition of accounting from a strictly administrative function to a value-added strategic advisory service.

“Corporate financial processes and the quantification of accounting data will become more automated,” said Daniels. “Rather than making accountants redundant, this frees them to provide business context to the resulting data and direct organisations towards its meaningful strategic application.”

Fundamental to all future successful accounting firms will be embracing technology developments to improve practice efficiencies, enhance how clients are serviced, and expand the range of services provided.

Accounting practitioners should look at the rise of AI, for example, not in terms of potential job loss, but the elimination or evolution of tasks; this approach will lead them to focus on the opportunities new technologies bring. Professional judgement will remain essential to advising clients and adding value.

Trends
On both days, international and local industry experts spoke on topics covering a variety of concerns.

These included how technology would change the way business is carried out, how this would affect the services expected of accountants, and what competencies they would need to acquire to respond effectively to future demands.

Of note was guest speaker Daniel Susskind, co-author of The Future of Professions and international expert on the effects of technology on professional services. His message was that, ultimately, accountants should not use technology to do their work more efficiently. Rather, they should develop completely new approaches to solving their clients’ problems.

“We are telling SAIPA members that accountants must not do things differently but do different things,” said Daniels. “Daniel Susskind articulated this idea concisely.”

It was also apparent that accountants would need to acquire competency in data analytics to respond to new information requirements and create value from it for their clients and employers.

“Businesses will want their accountants to explain what the numbers mean and what to do about it,” said Arthur Goldstuck, guest speaker and CEO of the technology research firm, World Wide Worx.

Centres launched
The first day of the Accounting iNdaba ended with Daniels and Professor Rashied Small, Executive of Thought Leadership, launching the Institute’s Centre of Future Excellence (CoFe).

The Centre’s purpose will be to gather research and identify emerging trends in business and the accounting profession. It will use this data to develop education, training and promotional programmes for the profession.
Its opening was accompanied by the Centre of Business Advisory (CoBA), along with the new SAIPA designation of Professional Business Advisor (SA). The Institute also launched its revamped Centre of Tax Excellence (CoTE).

“Each Centre focuses on specialised competency needs of the Future-Ready Professional Accountant,” said Daniels.

A successful event
According to Daniels, the event went smoothly. “Of course, we expected some issues but everything went according to plan with excellent technical continuity throughout,” he said.

SAIPA’s Accounting iNdaba will return next year.

ENDS
 
MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za 
For more information on SAIPA please visit:
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Twitter: @SAIPAcomms
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The South African Institute of Professional Accountants (SAIPA) has ended its old model of issuing hard copy membership certificates, opting instead for a modern, online system of e-certificates.

“E-certificates will allow clients and the public to instantly verify the professional authority of our accountants and the authenticity of their work,” says Faith Ngwenya, Technical and Standards Executive at the Institute.

Each SAIPA member who remains in good standing with the Institute will be provided with a personalised digital seal. This must be displayed on both printed and electronic texts, such as their email signature, business card or financial statements approved by them.

Anyone can click on the seal, or scan its included QR code, to be taken to an online certificate confirming the holder’s identity and membership status.

Why e-certificates?
According to Ngwenya, printed certificates and the process of maintaining them suffer from several shortcomings readily eliminated by modern digital technologies. Specifically, they are easy to lose and harder to replace, whereas e-certificates are downloaded from the Institute’s systems each time the seal is activated.

Physical certificates are also easier to forge and more difficult to validate. E-certificates, however, are updated with the member’s latest credentials and their current standing with the Institute at the moment they are requested.

“This real-time response to inspection requests means that users of accounting services from our members, can immediately see if they are dealing with someone who is qualified and has a clean record with their professional body,” says Ngwenya.

Building trust and professionalism
E-certificates prevent unaffiliated accountants or unqualified impostors from passing themselves off as SAIPA members who bear the Institute’s Professional Accountant (SA) designation.

This includes former members who have been found guilty of misconduct, remain non-compliant with the Institute’s requirements for continuous professional development (CPD), or no longer meet its standards for service excellence and professional ethics.

“E-certificates provide a significant level of transparency that will help us clean up the profession and restore its good reputation while protecting SAIPA’s trusted brand,” says Ngwenya.

Public awareness
SAIPA is encouraging the public to be on the lookout for their accountant’s digital seal and to click or scan it to satisfy themselves they are dealing with an authentic service provider.

If it is not displayed prominently on their vendor’s business stationery or electronic communications, they should query the practitioner about it.

The seal can also be used to provide assurance that a financial statement or report was prepared or approved by a qualified professional.

Future readiness
Shahied Daniels, Chief Executive of SAIPA, says the new system is part of the Institute’s larger strategy to develop Future-Ready Professional Accountants.

“SAIPA has committed itself to lead the evolution of the accountancy profession in the Fourth Industrial Revolution. E-certificates are just one of our initiatives for achieving this goal and ensuring our members remain relevant and responsive in a digital economy,” he says.

Physical SAIPA membership certificates were discontinued in August and should no longer be accepted as proof of professional affiliation.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za 
For more information on SAIPA please visit:
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Twitter: @SAIPAcomms
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The South African Institute of Professional Accountants (SAIPA) intends to fundamentally
re-imagine the way the accountancy profession is perceived, developed and utilised.
 
This was announced at an online media briefing presented by Shahied Daniels, the Institute’s Chief Executive, on Thursday, 3 September.
 
“We have begun thinking differently about what accountancy is and needs to be in a world marked by advanced technological capabilities and extreme socio-economic conditions,” he said.
 
Daniels outlined how SAIPA will approach these requirements.
 
Ethics
Daniels said that in the 18 years since the Arthur Andersen and Enron incident, and in the wake of other major accounting scandals since, the profession has come under increasing public scrutiny. Accountants are expected to be ethical flag bearers, by providing quality information used to make business decisions which impacts the socio-economic well-being of people, and SAIPA’s objective is to regain the public trust.
 
“Adding additional regulations to existing regulations has proven ineffective, because regulations seldom change behaviour which drives ethical and professional conduct” he said. Rather, it is critical that ethics is continuously reinforced through regular training, awareness and professional bodies holding their members accountable.
 
SAIPA has therefore made ethics a compulsory part of its continuous professional development (CPD) programmes, aligning with SAQA’s current professional accreditation criteria. In addition, SAIPA members must now confirm their commitment to ethical conduct by signing an annual pledge.
 
4IR
SAIPA acknowledges that the accountancy profession is being radically re-imagined by the Fourth Industrial Revolution and plans to prepare its members accordingly.
 
“SAIPA will ensure its members rapidly transition from merely performing mechanical and repetitive tasks to become value creators and to be seen as trusted strategic business advisors by their clients and employers,” said Daniels
 
SAIPA’s premier designation, Professional Accountant (SA), will become a fusion of human competencies and digital capabilities to facilitate effective and ethical decision-making, he said. It would also expand into auxiliary services that extract greater value from accounting data.
 
This means they must acquire new skillsets, such as digital proficiency, data literacy, critical thinking, and strategic assessment of business development initiatives.
 
SAIPA’s response
To improve secondary and tertiary accountancy education, SAIPA is developing an educational roadmap and curriculum that embraces data science, data analytics and digital proficiency as essential competencies for the profession.
 
SAIPA has also grown its National Accounting and Maths Olympiad competition to encourage school leavers to shift their focus from memorisation to cognitive development.
 
Further, the Institute has established a Centre of Future Excellence (CoFE) to ensure its competency framework aligns with an increasingly digital world, both in and beyond 4IR.
 
Small-to-medium accounting practices often build value by collaborating with non-accountants. To assist them, SAIPA has established the Centre of Business Advisory (CoBA) where non-accountants who meet its professional requirements can become affiliate members.
 
According to Daniels, the Institute’s long-running Project Achiever programme, which prepares candidates for its Professional Evaluation, and is funded by the Finance and Accounting Services Sector Education and Training Authority (Fasset), has received much attention for its lasting effects on broader proficiencies and soft skills.
 
Conclusion
Daniels said SAIPA’s initiatives are critical to ensuring the profession is prepared for a digital-driven future.
 
“They will also enable it to evolve its value proposition and service offerings for demands in business and society by creating value,” he said.
 
The date of the briefing was significant in that it marks the 14th anniversary of the Institute’s historic name change to depict the role SAIPA has been fulfilling in the profession over the past 38 years.
 

Accounting professionals who acquire the necessary new skills will position themselves well for an uncertain future in the post-COVID-19 world.

By Professor Rashied Small, Executive: Centre of Future Excellence (CoFE), South African Institute of Professional Accountants (SAIPA)

It’s a brave man who will predict the future, especially in the wake of the COVID-19 emergency —everybody was expecting a pandemic, but it was the scale of the response that nobody foresaw. But while one should resist making detailed predictions, it would be equally foolish not to recognise the currents that are going to shape our world and, more particularly, our profession of accounting.

It’s clear that organisations that are agile and responsive to change were more likely to have spotted the threat posed by COVID-19 early on, and thus gave themselves time to ready themselves for change even though they were not necessarily certain about the details of that change.

One of SAIPA’s main aims is to help its members identify the trends that will be shaping the profession, and to help them acquire the skills they need to navigate the uncertain waters of change. We have identified the following trends that look set to disrupt accountancy:

Impact of technology on the profession. The impact of technology on business and society is undeniable, but professionals have tended to feel that they are to a great extent protected from anything more significant than having to learn some new technologies. It’s becoming clearer by the day that this is largely illusory. Advances in artificial intelligence and machine learning coupled with the immense processing power of the cloud (the Fourth Industrial Revolution) means that many of the services currently rendered by accountants can be done better, faster and cheaper by software.

At a more profound level, increasingly sophisticated automation means that accountants can no longer rely on producing information — financial statements, balance sheets and so on—but must become information users and knowledge producers. This is good news because accountants are highly skilled people with a lot to offer both the private and public sectors. — and now they can focus on adding genuine value.

This will require a substantial mindset shift for many professional accountants. It will also mean that they will need to invest sensibly in technology and, particularly, in their own technology skills. Only by being expert users of the increasingly sophisticated software that is available will they be able to carve out a niche for themselves.
The days of simply churning out “the numbers” are rapidly ending.

Changing client demands. The flipside of the technology revolution is that clients will be able to do more for themselves, and their demands for advice will become more sophisticated. In many senses, both the private and public sectors are becoming more complex and the environment in which they operate is more uncertain. Their reliance on advice rather than information is likely to grow. Professional accountants must be ready to move from being primarily numbers people to something more like financial strategy consultants or advisors. To make this jump, they will need to understand the value of the data that the systems have generated, and how to use it to advise clients.

In the end, I believe that professional accountants can essentially position themselves as virtual CFOs for smaller enterprises, providing them with the financial insight they need to survive.

Growing regulation. Financial services are already highly regulated but expect more regulation to be coming your way. Fourth Industrial Revolution technologies can be of great assistance in boosting compliance, and professional accountants need to understand how to use them to align themselves with the spirit as well as the letter of the law.

Virtualisation of the working relationship. As many have observed, COVID has forced everybody onto virtual platforms to conduct both business and social life. As with the Fourth Industrial Revolution technologies that are transforming their profession, accountants must embrace this change which is likely to be long-lasting. In due course a hybrid model will doubtless emerge, but virtual consultations have much to offer: they save an enormous amount of time and can be remarkably effective. A more virtual client relationship also means that a professional accountant can service a much greater number of clients over a theoretically unlimited geographical area.
Perfecting the technique of using a video call to build or deepen a relationship is going to be an essential skill for professionals as well as businesspeople.

Build resilience into your business model. The disruption caused by the current pandemic should serve as a wake-up call for smart professional accountants. Not only should they focus on risk identification and mitigation, they need to take steps to ensure that their practices are better able to adapt to the unexpected at speed. Above all, resilience will depend on the ability to cope with the materialisation of unforeseen risks.
Rather neatly, those who embrace the technology revolution will find themselves better positioned to change—or “pivot” as the new jargon has it—when the next unexpected challenge comes their way.
Are you future-proofed? 
ENDS


 
MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za 
For more information on SAIPA please visit:
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Twitter: @SAIPAcomms
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Opening up the economy safely has become a clear priority, even as infection rates appear to be spiking. 

By Professor Rashied Small, Executive: Centre of Future Excellence (CoFE), South African Institute of Professional Accountants (SAIPA)

It’s been clear for some time that Government has realised the imperative to open up the economy. But, at the same time, it faces a significant challenge because infections in the country’s economic heartland of Gauteng appear to be on the rise. Balancing economic and health interests successfully will require a sure hand on the tiller—and the full cooperation of the populace, including business.

Something of a tall order, we can agree.

On the economic front, the Emergency Budget tabled on 24 June by Minister Tito Mboweni makes the dire fiscal reality very clear: the economic devastation caused by the lockdown has reduced tax collections while increasing calls on the fiscus. Government needs more economic activity to increase the taxes it can collect. Its ambitious social projects devour money, and more are planned. At the same time, the country is already heavily indebted to foreign lenders and it seems like more debt is inevitable. Debt repayments already consume much of our fiscal income and cannot be avoided without further damaging consequences.

The now-lifted ban on the purchase of alcohol for home consumption and the ongoing ban on alcohol consumption in public and on all tobacco products represent anomalies that have not yet been properly explained. From an economic point of view, the fiscus is being deprived of a steady stream of much-needed revenue, while forcing addicts to turn to the black market is having all sorts of unhappy consequences, not the least of them being reduced compliance with the law.

There are also some indications that the ban on cigarettes and the continued constraints on social interaction could be exacerbating the high incidence of gender-based violence in our communities. Clearly the roots of what the President calls the “second pandemic” are deeper, but the impact of these factors is clearly causing concern.                                                                                                                                                            
But the economic imperative also speaks to the need to help citizens put their lives back together. Many have lost formal jobs but at least had the benefit of a retrenchment package; others have had to take a salary cut. But a huge proportion of our economically active population is self-employed in micro-enterprises or is employed by “informal” businesses in the so-called “kasi economy”. These individuals, especially those in micro-enterprises, do not have the luxury of retrenchment packages—work is the only way this vulnerable group puts food on the table.

Reducing the economic burden on citizens and their dependents is critical not least from a socio-political viewpoint: if people cannot discharge their obligations to dependents, civil disobedience can follow.

Isolated incidents of looting and, recently, the unilateral decision by taxi owners to break lockdown laws by reverting to 100% occupancy are examples of how economic pressures will drive ordinary citizens to break the law—even when they put their own health at risk.

Rebuilding the social compact
To combine economic revitalisation and health/ safety, the government must successfully transfer responsibility from the state (lockdown and all its attendant laws) to civil society, both individuals and corporates. This is a difficult exercise to pull off at the best of times, but government has squandered a lot of the trust it originally enjoyed. The public has grown cynical about the myriad regulations that appear to be irrational; heavy-handed policing and related deaths have further eroded trust. But perhaps most important of all, the extreme slowness with which the much-heralded aid to citizens and companies has been rolled out, and the growing suspicion that corruption is occurring, has reduced the propensity to follow the government playbook.

An additional challenge is that the move to remote working has thrown established governance structures into disarray. Employees who are working remotely are less open to physical supervision, and digital supervision techniques are often embryonic in many organisations.

To overcome these challenges and promote the rebuilding of the social compact in which individuals and corporates act in everybody’s best interest, will take some doing, but it is possible. I believe it will require government to demonstrate that it has a viable long-term plan that integrates the competing needs of the economy, of individual citizens and our general health and safety. Up to the present, although government has consistently indicated that COVID-19 is with us for the foreseeable future, its plans have seemed ad hoc, short term in focus. If civil society can be convinced that a long-term and carefully constructed plan exists, then we may yet win through.

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za 
For more information on SAIPA please visit:
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Twitter: @SAIPAcomms
LinkedIn: South African Institute of Professional Accountants Company
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On 24th June, Finance Minister Tito Mboweni presented the supplementary budget in response to emergency measures taken to combat the COVID-19 pandemic.
 
According to Ettiene Retief, Chairman of the National Tax and SARS Committee at the South African Institute of Professional Accountants (SAIPA), the presented figures may not fully consider the knock on effects of the disrupted economy.
 
“While I have every confidence in SARS’ ability to collect available revenues, I’m not sure the Minister’s downward adjustments account for the coming reality,” he says.
 
Projections
Mboweni said that, in 2020, a global economic contraction of 5.2 percent is expected while the South African economy is expected to shrink by 7.2 percent. Unemployment had already risen to 30.1 percent in the first three months of the year and inflation is projected at 3 percent.
 
He also noted that the country is reliant on exports and this has been impacted by the collapse in global demand and restrictions on economic activity.
 
The projected total consolidated budget spending, including debt service costs, will exceed R2 trillion. Gross tax revenue for 2020/2021 is revised down from R1.43 trillion to R1.12 trillion, for a loss of R300 billion. Tax relief measures and adjustments result in a consolidated budget deficit of R761.7 billion (15.7 percent of GDP) up from the R370.5 billion (6.8 percent of GDP) stated in February.
 
Gross national debt will be R4 trillion (81.8 percent of GDP) instead of R3.56 trillion (65.6 percent of GDP) projected in February.
 
Real impact
According to Retief, even the adjusted tax revenue of R1.12 trillion may not be achievable. “Although companies are reopening, for many this will be a gradual process over the next 12 months which will hamper them from recovering the losses they suffered during lockdown,” he says.
 
He notes that other businesses will be forced to close, many employees will be retrenched from surviving ones, and remaining workers may be forced to take pay cuts of up to 30 or 40 percent. “We will have to wait another three months for the latest unemployment figures, so we can assume that current unemployment is much higher,” he says.
 
At the same time, consumer and business buying behaviours will change. Individuals may eat out less or holiday less, due to the risk of contracting the virus, resulting in lost revenue for local businesses. They may also defer purchases, like home improvements, because of lower pay. Likewise, companies will have less funds for business development.
 
Knock-on effect
“This has a snowball effect that affects vendors across the supply chain and further slows economic activity,” says Retief. He believes it is almost impossible to model the full extent of the fallout because each sector and industry will have a different recovery rate, which will be staggered across sectors and industries.
 
“All of these factors and the resulting slump will have a far-reaching and unforeseeable effect on tax collections,” says Retief. The government therefore needs to amplify its efforts to restart the economy if it wishes to achieve its target.
 
ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za 
 
For more information on SAIPA please visit:
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Twitter: @SAIPAcomms
LinkedIn: South African Institute of Professional Accountants Company
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We all face ethical dilemmas during our lives, but for the professional the stakes are particularly high.
By Shahied Daniels, CEO: South African Institute of Professional Accountants (SAIPA)
 
We all make choices every day, from the trivial (“What coat shall I wear?”) to the significant (“Should I take advantage of this loophole in the accounting system?”). Many choices have no right or wrong answer, or there is clearly a right one. But then there’s the ethical dilemma which, strictly speaking, is a dilemma in which either each alternative is “right”, or each will compromise an ethical principle.
 
It is not called “the horns of a dilemma” for nothing—making the right choice can be excruciatingly difficult.
 
Ethical dilemmas are relatively rare in personal life but, in professional life, they crop up more frequently. Professionals must balance the ethics of their profession, serving the interests of the public and serving the interests of the client.
 
One can distinguish several different types of common ethical dilemma. One is when ethics derived from one’s culture or beliefs conflict with legislation—this is likely when laws are unjust, or in multicultural societies where the law is based on one set of cultural or religious precepts. This can lead to a conflict between personal morals, laws or regulations, and professional ethics codes.
 
During the Level 5 lockdown, many individuals and organisations faced an acute ethical dilemma because of the prohibition on supply cooked food to the needy. Similarly, nurses often had to choose between allowing a COVID-19 patient to receive visits from family members and the need to keep the infected individual isolated.
 
Another common type of ethical dilemma relates to industry practices. A Professional Accountant might work in, say, the oil and gas industry and become habituated to the accepted codes of behaviour and regulation in that industry, and then shift industries only to find that some of these are not accepted in the new environment, or are indeed contrary to industry-specific regulations.
 
The same might occur even when moving between companies within the same industry.
 
A topical ethical dilemma could concern the CFO of a government department being asked to bypass payment or tender procedures to facilitate the swift rollout of an urgently needed social relief programme.
 
An important factor that complicates ethical dilemmas is that the added complication that one has to engage with the ethics of other stakeholders. For Professional Accountants in particular, a significant and common dilemma relates to assessing the integrity and materiality of the information supplied to them by clients.
 
Making the choice
So, when trying to navigate the correct choice between two conflicting ethical courses, how should one proceed? There are some useful rules of thumb, the first of which is the legal test. Is a law going to be broken? If so, the choice is between a law, which can be enforced, and a moral code, which cannot. If the option you choose is legal, then there are other tests to apply. Does it carry the stench of corruption? Would you be happy to see your choice being communicated on a billboard or the front page of a news site? And, finally, what would another person who values and cares for you think about your choice—your parent or spouse, for example?
 
Those who are bound by professional codes of conduct, such as Professional Accountants (SA) also have the benefit of an official code of ethics to help guide them. It can also be extremely useful to speak to fellow professionals or a fellow member of your professional association.
 
When confronting an ethical dilemma, one could argue that the principle embodied in the Business Judgment Rule could be helpful. The Rule is used to protect directors from liability or censure if a decision they take later proves to have been faulty. Fundamentally, the Rule provides directors with a “safe harbour” if they can show that they took all reasonable steps to inform themselves and properly applied their minds to all the factors before making their decision—in other words, that they acted competently as directors and in good faith for the benefit of the organisation based on the information before them.
 
Professionals confronting a tricky ethical question could well make use of the same principle. In the end, because an ethical dilemma is ultimately about choosing between two “right” choices, the best one can do is make the decision as rationally as possible, taking everything into account and taking all reasonable steps to ensure the most appropriate outcome in the circumstances. In addition, professionals would be well-advised also to keep a record of the decision-making process they followed so that it their choice is later questioned, they can demonstrate the process they followed in arriving at it.

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

On 10 June 2020, the South African Institute of Professional Accountants (SAIPA) successfully concluded its first virtual AGM on the Zoom conference platform. The meeting encountered no technical difficulties and digital interaction between the Board and its Members was seamless.
 
“I am very happy with the smooth execution and satisfactory outcome of the event, as well as how we were able to more efficiently progress through our agenda using technology,” said Kantha Naicker, SAIPA Chairman of the Board.
 
Voting on various matters, facilitated by the auditor, was conducted by way of the platform’s polling system.
 
Slowed but not halted
 
Although attention was devoted to the SAIPA’s response to the COVID-19 crisis, the emphasis was on our roadmap towards digital and service transformation to ensure that we are aligned to the requirements of the Fourth Industrial Revolution. Particular attention was devoted to the steps that need to be taken to ensure that the profession, the Institute and our members are future-ready and well equipped to serve the interests of our country and the communities in which we operate.
 
During their presentations, both Kantha Naicker, the SAIPA Chairman and Shahied Daniels, the Chief Executive of SAIPA, drew attention to the fact that SAIPA had, despite being encumbered by the consequences of the pandemic, explored the most optimal and innovative ways of continuing to perform its responsibilities.  By virtue of its new home-grown digital cloud-based platform and its willingness to embrace technological advances, SAIPA maintained operational continuity and was able to further enhance its service delivery.
 
“Because we own the intellectual property related to this system, so we are able to rapidly enhance its functionality and the services we deliver, not having to be concerned with proprietary restrictions,” said Daniels.
 
Future-driven
 
After the opening presentation by the Chairman, Daniels provided members with a summary of the Institute’s outlook and strategic direction during the year ahead.  He emphasized the primary responsibility of minimizing the COVID-19 risks to which the staff and management, the board and our members are exposed.  Furthermore, he stressed the need to continuously keep members appraised of the latest developments and of opportunities they could leverage to add value for themselves and by so doing enhance the Professional Accountant (SA) designation.
 
Daniels drew attention to the fact that globally the accounting profession was in a transformational phase, which was primarily due to rapid advances in technology that are compelling the profession to chart a new future.   “Professional Accountants (SA) must move their current skillset towards what is needed to provide a business advisory service to clients; a service that is value creating and value adding”, he said.
 
Bearing in mind the developments in the profession, SAIPA will need to adopt a strategy that provides for restructuring the Institute in such a manner that it is future-ready and remains future-fit.  SAIPA accepts that the ultimate goal must be to empower our members to become increasingly credible and trusted business advisors that are able to meaningfully contribute to inclusive socio-economic prosperity.
 
Service-based strategy
 
Daniels pointed to SAIPA employing a GREG (Governance, Risk, Ethics, Compliance) framework to guide it on the road ahead.  Consequently, the Institute embarked on implementing the results of a major governance review that was focused on compliance, board and operational committee structures, policies and procedures, and problems that were encountered in previous years. “Our challenge for the year ahead is to ensure we consistently implement and enforce appropriate processes, procedures and practices,” he said.
 
Having streamlined its personnel requirements, the Institute is now committed to building a culture of trust and performance excellence, whilst simultaneously instilling a service philosophy that inspires its staff to deliver superior service to members.
 
With respect to CPDs, the aim is to upskill and reskill members by way of an enhanced competency framework. “We are developing visionary thought leadership that will secure our position as the Professional Accounting Organisation of choice,” said Daniels. Consequently, SAIPA had established a Centre of Future Excellence (CoFE), which is led by Professor Rashied Small, the SAIPA Executive for Thought Leadership.
 
The intention is to sharpen the further focus on rebuilding public trust and maximizing the ethical conduct of members. This initiative will inter alia involve the recertification of all members, the signing an ethical pledge by all members, the establishment of a comprehensive practice review system. This will be augmented by a major ethics and professional conduct campaign to reinforce the attention paid to public interest and trust.
 
An ongoing initiative will be to actively engage members by virtue of various initiatives, such as the monthly open agenda forum, which will be hosted by the Chief Executive and afford members the opportunity of sharing their wishes, concerns and queries in a face-to-face interaction, albeit two-dimensional.   “Our intention is to promote a culture of transparency and to provide an open line of communication to our members,” Daniels said.
 
AGM close
The AGM concluded with the swearing of new Board members, whereupon the Chairman closed what had been an uneventful and very successful meeting, reiterating her unwavering commitment to serving the Institute for the final year of her tenure as Chairman.  
 
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

For Professional Accountants, the way you engage with clients is an ethical issue too.
By Shahied Daniels, CEO, South African Institute of Professional Accountants

When one thinks about ethics, one’s mind immediately conjures up some big moral dilemma and how you, as a professional, should act. That’s obviously part of it, but true ethics should be embedded in the way a Professional Accountant (SA) conducts his or her business in the ordinary course of events—in that sense, everything a Professional Accountant (SA) or any other professional does in his or her business life should be done ethically.

This is particularly evident in the way a Professional Accountant (SA) engages with clients.

Clearly, any business relationship needs to be conducted with the utmost professionalism, but it must also be admitted that there is considerable scope for dispute. This is particularly true when the professional is providing vital services or dealing with sensitive information, as an accountant does. In areas like this, the boundary between professional and ethical conduct is necessarily blurred: the one cannot exist without the other.

To ensure that they engage with clients both professionally and ethically, Professional Accountant (SA) need to follow these three guiding principles:

• Begin with a well-drafted letter of engagement. A letter of engagement is essentially the contract that sets out what services the Professional Accountant (SA) is going to provide, and all other material facts relating to the nature and scope of the services. If there is any dispute, or a Professional Accountant (SA) comes before SAIPA’s disciplinary committee, this is one of the first things to be considered because everything flows from what was agreed.

Most professionals will use a template to save time, but each engagement is unique—make sure the template is adjusted to reflect the true nature of the engagement.

It is important to watch out for scope creep or amendments. It is quite common for clients to expand the work they want done, or to request additional services (such as doing personal tax). Make sure that these amendments or additions are noted either in an addendum to the original letter of engagement or, if appropriate, a new one.

A good letter of engagement will make it clear what a Professional Accountant (SA) has undertaken to provide and thus will make it easier for him or her to deliver what was promised, and thus be both professional and ethical.

• Only undertake what you are competent to provide. Acting professionally and ethically does not just mean being clear about the scope of the engagement; the ethical Professional Accountant (SA) must be certain that he or she has the necessary skills to deliver a good result for the client. For example, a Professional Accountant (SA) might be doing tax for a client and is then asked to help with estate planning—but has not done any for years. In other words, his or her skills are neither honed nor up to date. The ethical approach would be either to partner with a colleague who does have the skills and experience, or to take steps to obtain the necessary skills. At the most fundamental level, it would be highly unethical to deliver substandard services knowingly.
• Maintain confidentiality… except when the law is being broken. Clients have a reasonable expectation that the professionals they deal with will never divulge any information about their affairs to a third party

There is one exception. In terms of their ethical code, Professional Accountants (SA) cannot engage with clients in a way that contravenes the letter or the spirit of the law. Across the profession, the same standard has been agreed to offer guidance in this regard. Known as NOCLAR (non-compliance with laws and regulations), the standard is extremely broad and is codified by the International Ethics Standards Board for Accountants (IESBA) into a standard called Responding to Non-Compliance with Laws and Regulations. The NOCLAR standard provides guidance on how to disclose NOCLAR to public authorities without breaching client confidentiality and provides an alternative to simply resigning.

It is advisable that clients understand this issue and spelling it out in the letter of engagement would be wise.
As always, ethics and true professionalism turn out to be two sides of the same coin.

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

Globally, ethics is becoming recognised as the hidden asset on which long-term success is founded.
This is especially true for the professions like accounting.

By Shahied Daniels, CEO, South African Institute of Professional Accountants (SAIPA)

As South Africans come to terms with state capture and everything it means for our economy and public life, the importance of ethics is receiving recognition. We can all see that even the best laws can be circumvented or broken—and that legal processes are slow and expensive.

By contrast to law, ethics relates to an individual’s sense of morality, or right and wrong. An ethical person is guided by law, to be sure, but he or she is fundamentally motivated by trying to do what is right. One could say that law is about rules while ethics is concerned with principles.

In the most basic sense, one can trust that an ethical person is not trying to get away with what he or she can but is trying to do the morally correct thing.

Clearly, it is important that everybody is ethical in how they deal with all their affairs, personal and business, but it is critical in the professions. Professionals like accountants, doctors and lawyers deal with extremely sensitive matters, and their advice and actions have life-or-death consequences or spell the difference between financial success or failure.

Managing ethics
When it comes to ethics in general, there are different conceptions of what is right and wrong. This problem is more acute when one exists in a multicultural environment such as South Africa.

Another challenge is that deciding specific ethical questions can be surprisingly difficult at times, as most people can confirm from experience.

In response, professional organisations like SAIPA develop ethical codes to guide their members’ actions in their professional lives. These codes offer clients the peace of mind that comes from knowing that the professional they engage with have subscribed to the code and will be held accountable to it.

SAIPA has subscribed to the Code of Ethics for Professional Accountants developed by the International Ethics Standards Board for Accountants. Those holding SAIPA’s certification as Professional Accountants (PA(SA)) thus have a well-structured framework to assist them in making ethical decisions.

It is important to emphasise that ethics is not about following rules, but rather principles. Codes of conduct can help Professional Accountant (SA)s work out how principles should be applied, but they do not specify certain actions.

King IV, the latest iteration of South Africa’s governance code, follows the same approach by focusing on outcomes and not rules.

Audi alteram partem--the requirement to be fair
For a professional body like SAIPA, holding its members accountable to an ethical code is critical in building public confidence in the profession generally, and the Professional Accountant (SA) designation in particular. That means holding members accountable to the code.

Here it is important to stress that SAIPA and other professional bodies must be rigorously fair when it comes to holding members accountable. The key principle here is audi alteram partes, the Latin maxim that means “listen to the other side”. This is a foundation of any fair legal system and should never be ignored in the interests of expediency. SAIPA thus has a carefully thought-out process to allow members to respond to complaints, sift the evidence, and decide whether sanction is needed, and what form it should take. As in law, there is also an appeal process when a member feels that an incorrect decision has been taken.

Gold standard
The gold standard refers to the practice of backing paper currencies with gold, a practice that has fallen somewhat out of favour in today’s financial systems. However, the phrase remains as a vivid metaphor for the concept that true worth is underpinned by something solid.

Digital technologies are ushering in the Fourth Industrial Revolution, which in turn is automating many accounting processes. But in this often confusing and fast-moving digital environment, trust has become almost a currency—and trust is founded not only a profession’s record but the knowledge that he or she is bound by an enforceable ethical code. Ethics, and the trust they engender, have always been the foundation of a successful professional career, and that is one thing that is not going to change.

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