CA Profiles – Accountancy SA

https://www.accountancysa.org.za Home Wed, 10 Jan 2024 11:41:49 +0000 en-US hourly 1 https://wordpress.org/?v=7.1.2 Difference Maker: A new chapter – Freeman Nomvalo reflects on transformation, discipline, trust and leadership https://www.accountancysa.org.za/difference-maker-a-new-chapter-freeman-nomvalo-reflects-on-transformation-discipline-trust-and-leadership/ Thu, 11 Jan 2024 07:00:26 +0000 https://www.accountancysa.org.za/?p=27285

Freeman Nomvalo’s five-year term as CEO of SAICA came to an end in December 2023. He was appointed in 2019 after the accounting profession had suffered a series of scandals, including the collapse of VBS Bank and Steinhoff, as well as a clean audit of the Gupta family companies. In Nomvalo’s final town hall, he shared his insights into the challenges and achievements along the way.

In March 2020, then Finance Minister Tito Mboweni announced the appointment of an independent panel to review the practices of the auditing profession, the aim being to enhance audit quality and restore trust in the profession.

Locally and globally, high-profile corporate failures and alleged audit failures had weakened public trust and confidence in the profession and business at large, negatively impacting economies. Most jurisdictions were wrestling with the issue of audit quality and the integrity of capital markets. The recently appointed Nomvalo was about to undergo a baptism by fire.

The need for change
All changes were to be aligned across the financial reporting ecosystem through comprehensive regulation. At that stage, the Independent Regulatory Board for Auditors (IRBA) in South Africa had already introduced various measures to address some of the potential areas of improvement in the South African environment, including the introduction of audit quality indicators (AQIs) to assist firms and their clients to identify potential areas of risk. Other changes included amendments to the Auditing Profession Act, the Companies Act and several changes to the global codes of conduct for auditors issued by the International Ethics Standards Board for Accountants.

‘Restoring trust in such a climate was daunting. This led SAICA to embark on an audit reform project,’ Nomvalo recalled. ‘We conducted extensive consultations with various stakeholders, including auditing firms, regulators, oversight structures such as boards of directors and audit committees, government, business groups, and users of financial statements. We challenged the long-held belief that auditors should be watchdogs, not bloodhounds. We pondered whether the market, in light of numerous corporate failures and evolving regulatory landscapes, might be expecting something different from us. Recent regulatory changes by bodies like India’s National Financial Reporting Authority, and the introduction of stringent penalties for auditors, further fuelled this introspection. Despite some resistance, it was apparent that reevaluating the role of watchdogs in auditing was essential. My approach was to respect the established order, while gently challenging it to encourage positive change. I expected some resistance, but we succeeded in getting SAICA employees to build their belief in our collective success.’

Building trust and transparency
In recent years, SAICA has witnessed a remarkable increase in trust, both in the institution itself and in the accounting designation. This surge in trust is attributed to a strategic focus on transparency and public engagement. Efforts to demystify the operations of the accounting profession have been central to this strategy.

‘Discipline within the accounting profession is not just about penalising members for misconduct,’ Nomvalo said. ‘It’s a process that continues long after an offence has been committed. High-profile cases such as the Steinhoff scandal underscored the need for timely disciplinary action.’

Delayed disciplinary processes had weakened the public’s connection between the offence and its consequences. This necessitated a more proactive and immediate approach to addressing professional misconduct to maintain the integrity and credibility of the profession.

‘Suspending auditors immediately in cases of corporate malfeasance has significant risk implications,’ Nomvalo said. ‘Disrupting the audit process leads to delays in financial reporting and affects stakeholder confidence. Raising concerns among investors, creditors and regulators, can have an impact on the company’s market reputation and share value, and lead to legal and reputational risks.’

Bearing these factors in mind, Nomvalo engaged directly with SAICA employees, despite concerns voiced by their managers, to understand and address the underlying issues. His approach was geared towards reshaping SAICA’s reputation and credibility, and those of the profession. It worked.

‘SAICA has witnessed a significant increase in trust, both for the institution and the auditing profession. When I joined the organisation, trust in SAICA was at 78%; trust in the CA(SA) designation was at 81%. In 2021, trust in SAICA had risen to 86%, while trust in the designation had risen to 85%. This indicated that we were moving in the right direction. Today, at 6% ahead of the closest competitor, we are the envy of our global peers.’
SAICA has engaged with journalists and the public to share insights into its workings, enhancing understanding and confidence in its operations. Changes in by-laws, particularly concerning the publication of results of disciplinary cases, have further solidified this transparency. In the past, the discretion to publish disciplinary outcomes rested with the disciplinary committee, which sometimes opted not to publicise results to avoid further embarrassment to the involved parties.

‘This often led to perceptions of secrecy and concealment, even when none existed,’ Nomvalo said. ‘By adopting a policy of publishing all disciplinary outcomes, we have made strides in building trust through transparency and an environment of openness. I’m extremely proud of what we have achieved.’

Tackling racial disparities
One of the critical challenges that SAICA and the broader accounting profession in Africa have faced is addressing racial disparities, especially in examination pass rates. Historically, there has been a significant difference in the pass rates between African students and students of other races.
This disparity called for a comprehensive strategy to ensure fairness and equality in the competency tests. Under Nomvalo’s leadership, initiatives to bridge this gap included conducting cultural reviews of examination papers to ensure that they did not inadvertently disadvantage students from different cultural backgrounds.
‘We commissioned a comprehensive independent study to understand the root cause of the problems and reviewed the qualification process. This included a cultural review of examination papers, a focus on funding for students – particularly those who need to retake examinations – and the provision of academic, social and emotional support. We worked with the Association for the Advancement of Black Accountants of Southern Africa, African Women Chartered Accountants and other organisations to implement initiatives to support candidates, to close the inequality gap and ensure that no prospective CA(SA) was left behind.

‘These efforts have borne fruit,’ Nomvalo says. ‘There’s been a notable increase in the percentage of African, Coloured, and Indian (ACI) students passing exams. In 2019, ACI students constituted 53% of those who passed; this figure has risen to 63% and will continue to grow.’

The technology revolution
Navigating the profession through transformative times and embracing a mindset that values learning and adaptability over rigid expertise has been pivotal for Nomvalo.
‘The advent of the Fourth Industrial Revolution has introduced new challenges and opportunities,’ he says. ‘The accounting profession must adapt to these technological changes while maintaining the integrity of traditional accounting practices. We need to stay informed about emerging technologies such as AI, blockchain, and data analytics, and understand how to integrate these into established accounting methods. We continue to face regulatory challenges, as we navigate a complex landscape of laws and regulations related to technological advancements. This includes ensuring data security and compliance with international standards. Another significant hurdle is managing the internal resistance to change in a field with deep-rooted traditions.’

Nomvalo also touched on the need to address the skill gap created by new technologies, overseeing the reskilling of current professionals and recruiting new talent with specialised skills. In a global context, the profession has to consider different technological infrastructures and regulatory environments. In addition, the tech revolution has altered client expectations, demanding faster and more sophisticated services, which requires firms to adapt their service delivery while maintaining quality.

Transformation challenges and successes
The journey towards transforming the accounting profession has not been without its challenges. One of the most significant challenges has been breaking down silos within professional bodies and fostering a collaborative and open environment.

‘Overcoming these challenges requires a shift in mindset, where individuals take responsibility for their relationships with colleagues and approach interactions with a positive and open attitude,’ Nomvalo said. ‘It’s an approach that can help dismantle barriers and facilitate a more unified and effective professional body.’

Recognition and congratulations
Nomvalo praised SAICA’s finance team for making impressive strides with its new systems, and for developing both Android and iOS apps that will enable SAICA members to access services more efficiently. Although some of these services are still in development, this advancement was a milestone worth celebrating, he stressed.

He encouraged all members to appreciate and support each other’s contributions to the profession. A supportive culture is crucial for the professional growth of CAs. Learning from the varied experiences and expertise of peers is essential for staying abreast of the latest accounting standards, technologies and practices. Ongoing learning and development are crucial in a field that is constantly evolving due to regulatory changes and technological advancements. In a trust-based environment, we can engage in more constructive dialogues, improving decision-making and problem-solving. Supporting one another drives the overall success and credibility of the profession, ensuring high standards of practice and service to clients, he said.

Nomvalo extended his congratulations to all of SAICA’s Top 35-under-35 annual recognition programme award winners and nominees. ‘Recognition in our line of work is rare, and appreciating each other’s contributions builds a positive environment. Imagine a world where everyone is committed to each other’s success. This mindset reduces disputes and shifts focus to outcomes and accountability. I encourage everyone, especially during leadership transitions, to maintain this collaborative spirit.’

Nomvalo concluded by noting that the accounting profession, particularly in Africa, has made significant strides in transforming itself. By focusing on discipline, building trust, fostering transparency, and embracing growth and technological advancements, the profession has positioned itself strongly for the future. The journey, marked by challenges and successes, underscores the importance of adaptive leadership and a proactive approach to change.

‘Looking ahead, the accounting profession faces the ongoing task of adapting to an ever-changing world. We need to continue to push for diversity and inclusivity and maintain high standards of integrity and professionalism. The profession must remain vigilant in addressing any emerging challenges and seize opportunities for growth and improvement.’

]]> PROFILE | Figuring it out together https://www.accountancysa.org.za/profile-figuring-it-out-together/ Mon, 03 Apr 2023 08:27:53 +0000 https://www.accountancysa.org.za/?p=25774

Siphesihle and Jabulile Mlageni tell us about their love, marriage and careers in the accounting space.

Love and accounting are two quite different things, but they do share some similarities. Both require attention to detail, careful planning, and a commitment to making things work. Newlyweds Jabulile Nyathi CA(SA) and Siphesihle Mlangeni CA(SA) show that in love, just as in accounting, you need to be honest and transparent. Trust is key in both cases, and it takes time to build. Just as an accountant needs to be able to explain complex financial matters to their clients, partners in a relationship need to communicate effectively with each other to ensure that they are on the same page.

How did you meet?

We knew we work for the same organisation in 2016 even before we physically met. We officially met in person in 2017 at our head office premises. Before this, we were stationed in different provinces.

It was a casual meetup after work on a day that we both happened to be in the Pretoria office.

When did you realise he/she was the one?

J − I knew he was the one the moment I realised he thought I am the one (probably about three months into our relationship). I had my doubts at first, but his consistency and love made me believe if you have someone that decides to choose you every single day, he is definitely the man for you.

S − It was on a Friday evening when we went on our first date that I knew she was the one. She looked amazing and I felt so comfortable around her, notwithstanding that it was the first date. In the days that followed, it was her intelligence, compassion, and that she is a God-fearing woman that solidified my initial attraction to her.

How do you separate your personal time from your professional time during working hours?

While we work for the same organisation, we have never worked in the same unit or team. We met at a time where we were both professionally mature, thus separating professional time from professional time was spontaneous. Also, at home we do set time for family and for each other to avoid having a work-centred relationship/marriage.

Time spent with our children is also especially important. Planned trips and entertainment are part of that.

Who is the big spender?

S − The wife … !

J − Truth is that at times the spending is on him because he forgets to spend on himself.

What is the most beneficial thing that comes with both of you working in the same industry, same company, and same office?

We can relate on so many levels, we can support each other through our day-to-day work as well as career goals. In the audit environment, we work long hours, hence we both understand the amount of time invested in our work and can support each other through it. There is little room for explanation when it comes to that, because we already know and understand what it really takes. At times we can travel to work together (provided we are knocking off at the same time).

What have you learnt from each other since getting married?

J − I have learnt that my husband is strict and sometimes not so flexible. He is a perfectionist and that taught me to be more patient with him. At the same time, he has learnt to be more accommodative (compromise came into play).

S − She has been unleashing new cooking skills since we got married …

Do you have nicknames for each other? What are they and what inspired their creation?

J − He is Zulu (well, now we both are) … He started with the ‘Sthandwa’ name, and it continued.

What do you collectively hope to achieve in the next five years in your careers?

We hope not to remain employment dependent. As members of SAICA, we believe there are opportunities for growth that go beyond employment, and we would like to explore that (even if we may still be employed).

Do people ever make fun of both of you being CAs? If they do, what is your clapback?

Yes. We get that a lot: a lot of people believe that CAs are stingy and save everything earned. We do not clap back − we leave people to believe what they want. At times it is not necessary to explain when people have already drawn their own conclusions.

What comes first: fun or the cost of having fun?

J − For me fun, and for him, cost.

S − A happy wife equals peace in the home; she chooses peace, which means I win most of the time.

We understand that you can count on each other, but who is really counting?

J − He is dependable; I have learnt to let go of a lot of things that I would not usually trust anyone to do properly, but he has proven repeatedly that I can depend on him. In fact, I have stopped counting.

If there is anything we’ve learnt from these two, it is that while love and accounting may seem like very different things, they both require hard work, attention to detail, and a commitment to making things work. With the right approach and mindset, it is possible to succeed in both areas of life.

]]> PROFILE | Dynamic Duo https://www.accountancysa.org.za/profile-dynamic-duo/ Mon, 03 Apr 2023 08:16:24 +0000 https://www.accountancysa.org.za/?p=25770

Two female CAs(SA) navigate Durban ICC to impressive financial recovery.

While the finance industry has traditionally been male-dominated, women have undeniably been making great strides, rising to the top and proving their exceptional worth in the financial arena. This has never been more evident than in the standout example of the Durban International Convention Centre (Durban ICC) where two female finance executives have been instrumental in driving the entity’s financial recovery following the pandemic.

Melanie Rambally CA(SA)

Melanie Rambally CA(SA), CFO of the Durban ICC, and Thenashree Naidoo CA(SA), finance executive, have been at the forefront of this achievement. With a combined experience of over 40 years in the finance industry, they have brought their expertise and passion to the Durban ICC, leading the finance team to new heights.

The Durban ICC, like many others in the hospitality industry, was faced with a significant challenge when the pandemic hit. The global economic downturn had a profound impact on tourism businesses and many companies were forced to make difficult decisions, including making severe cutbacks and even layoffs.

However, using their expertise in financial management, they helped the company make smart decisions, minimise costs and maintain financial stability. Their sustained efforts meant the entity was able to continue operations and avoid any retrenchments.

Not only has the state-owned company shown a significant upward trajectory in its recent financial performance, but the centre also excelled in its commitment to compliance and accountability. According to the latest audit opinion form the Auditor-General of South Africa, the Durban ICC incurred zero irregular, fruitless or wasteful expenditure in the past financial year. In addition, the entity just received its seventh clean, unqualified audit in the last eight consecutive years. This a truly rare and impressive accomplishment in the country’s public sector environment, which is often plagued by non-compliance and maladministration.

Rambally and Naidoo’s contributions to the company’s financial recovery have not gone unnoticed. The company’s senior management and board of directors have praised their hard work, dedication and leadership. They have been recognised for their ability to balance the need for financial discipline with a commitment to the well-being of the company’s employees, even during the most difficult of times.

Rambally’s experience in financial management has been critical in ensuring that the entity operates efficiently and effectively. Her ability to identify areas for improvement and implement change has been instrumental in the success of the centre.

Thenashree Naidoo CA(SA)

‘Prudent decision-making is an important part of my role as CFO and one that I take extremely seriously. I always try to act in the best interests of all our stakeholders and make decisions which ensure the continued financial sustainability and viability of the entity,’ says Rambally. ‘I am grateful for the support of our board led by Mr Glen Mashinini, the Chair of our Finance Committee, Dr Mdu Bophela, our CEO Ms Lindiwe Rakharebe, and the whole finance team.’

Naidoo, on the other hand, has brought a wealth of experience in financial reporting and analysis. Her ability to analyse data and identify trends has been invaluable in ensuring that the convention centre is financially healthy. ‘I have always been passionate about finance and helping organisations achieve their goals,’ she says. ’I am proud to be part of a team that has delivered such outstanding results and I am excited about the future of the finance department.’

In conclusion, the recent financial recovery of this company is a testament to the talent and dedication of its female finance executives. Thanks to the leadership and expertise of Melanie Rambally and Thenashree Naidoo, the Durban International Convention Centre can look forward to many more years of outstanding performance from this dynamic duo.

]]> PROFILE | Trainee Trailblazer 2022 Overall Winner − Musa Sipho Maluleka https://www.accountancysa.org.za/profile-trainee-trailblazer-2022-overall-winner-%e2%88%92-musa-sipho-maluleka/ Mon, 03 Apr 2023 08:07:22 +0000 https://www.accountancysa.org.za/?p=25767

Marrying his passion for township development and training as a CA(SA), Musa Maluleka has launched Disktjie, a soccer boot line made especially for gravel pitches.

Even as he tunes stories about the genesis of his company, Musa Sipho Maluleka sets much store by mentorship, referencing a few elder statesmen of the accounting trade, including David Hurwitz. He also thinks highly of Bangladesh social entrepreneur Muhamma Yunus, calling him his ‘role model in business’.

Today, however, he won’t pass up the opportunity to acknowledge venerated chartered accountant Allan Gray, who was synonymous with the Allan Gray Orbis Foundation. ‘In a word, he inspires me,’ he pipes up.

‘The legacy of the late Allan Gray left through the Allan Gray Orbis Foundation changed my life and afforded me an opportunity not only to go to university but also to learn how to be a responsible impactful entrepreneur. I’m quite inspired to take the baton, run my race and pass on the baton to the next generations, as it was passed onto me by the Allan Gray legacy.’

Musa is of course the winner of SAICA’s 2022 Trainee Trailblazer competition and he’s also the founder and owner of Disktjie, a start-up in soccer footwear. ‘Winning the Trainee Trailblazer competition was a humbling moment,’ he says, adding that it’s elevated his business profile.

On a high level, the competition provided invaluable teachable moments, he says. ‘I left the competition quite inspired. To think that I was chosen as a trailblazer amongst so many talented individuals and upcoming CAs(SA). And I’ve truly learned that business is not a zero-sum game − where there’s an eventual ‘winner’ or best business − but it’s a collaboration from all of us and the work we all do to drive the human race that matters and creates great impact − which is a key business lesson that I’ve learned, and the importance of collaboration and cohesion to drive the human race forward.’

Growing up in Atteridgeville, a township in the west of Tshwane, Musa took to figures as a boy, knowing he’d wind up in business. In 2019, he was admitted to the Allan Gray Orbis Foundation scholarship, which − by his own account, anyway − cultivated his passion for entrepreneurship and solving problems.

The idea to establish Disktjie, his soccer boot line, was fuelled by unmet expectations he carried as a soccer-loving boy growing up in the townships. Aware of township surroundings, he noticed that soccer boots on the market were designed oblivious to the conditions on gravel pitches. ‘My recollections of the boots I owned is that they would only last about two months,’ he says. ‘That’s because soccer boots are not meant for people who play on gravel. In our townships and rural areas, we don’t have lawns on our soccer pitches − we have gravel pitches. So I started Disktjie, making soccer boots that are specifically made to play on gravel soccer pitches.’

With fire in his belly, he set about manufacturing his first batch of soccer boots, but nothing could have prepared him for the setbacks that awaited. ‘I took all my allowances I had saved from Grade 1 right through my university years and I made the first batch of soccer boots,’ he says. ‘I was so excited, thinking I’m going to take over the world, but I didn’t even sell one pair.’

But there was a lesson, he says. ‘I had an epiphany about consumers. I realised that people don’t actually buy products: they buy brands − brands that have stories behind them.’ He could also use endorsements, so he rustled a few professional soccer players to endorse his business. Then Disktjie began to gain traction.

In 2021, blessed with a bit of funding, he regrouped, launching an improved design. He went on to sell 300 pairs in the next twelve months. With growth in operations, he had to learn new skills in the mould of marketing, people skills and leadership. ‘I think the biggest lesson that I’ve learned is that great businesses are not built by individuals but by a group of people who are working together towards achieving the same goal.’

For all the strides he’s made in setting up the business, he has nothing but praise for his training as a CA(SA). ‘I realised the power of the skills I was going to acquire from CA(SA) route, which truly motivated me to take this path,’ he says. ‘The training will enable me to grow as a future business leader. As a trainee accountant with Deloitte in London, I’ve learned a lot from working in a multicultural work environment. Living in London taught me how to survive and thrive in chaos. I started cycling to work to save up on transport costs, at times cycling in freezing temperatures, which is quite challenging. It’s taught me resilience and the importance of being adaptable.’

The conversation reverts to the subject of role models, and Maluleke is in his element talking about his mother. He also speaks highly of his mentors, Kelebogile Sephoti and Krista Klive Smith, describing them as invariably present in his life.

‘My mother has been a godsend, supporting me from day one,’ he says. ‘Kelebogile and Krista are my mentors − the people who support me in my journey.’

Transaction Capital CEO David Hurwitz is the last word in entrepreneurial chartered accountants, he says. ‘We simply don’t often see many entrepreneurial CAs(SA), but David inspires me with his journey and the risk he took to pursue his entrepreneurial pursuits with Transaction Capital, and what they have been able to build over the past few years with SA Taxi and solving problems for South African taxi industry with SA Taxi.’

Musa relishes the prospect of growing Disktjie so that it’s one of the biggest players in the continent. It’s largely baby steps with only three people manning operations in Pretoria, but Musa believes he’s on course.

‘The idea is to have more and more of the kids playing soccer on gravel soccer pitches, encouraging them to adopt a mindset of solving problems,’ he says.

‘I want to see us crafting a business model that’ll ensure that even a kid from the poorest of backgrounds has a chance to own a pair of our quality soccer boots to play in our African conditions.’ We reckon he has a fighting chance.

Author
Mpho Tshikhudo

]]> PROFILE | Mbeko Mbebe – Delay and perseverance An inspiring journey to CA(SA) https://www.accountancysa.org.za/profile-mbeko-mbebe-delay-and-perseverance-an-inspiring-journey-to-casa/ Mon, 03 Apr 2023 07:52:45 +0000 https://www.accountancysa.org.za/?p=25764

The number of years it takes to get the CA(SA) designation is of less importance than your reasons for becoming a chartered accountant. Journeys differ significantly. The drive and passion of people at both ends of the spectrum − people who qualify at a very young age and those who do so when they are more mature in years − are inspirational in different ways. Mbeko Mbebe shares his journey and insights about the profession.

With the release of the December 2022 Assessment of Professional Competence (APC) results in February 2023, Mbeko Mbebe became a chartered accountant. He remarks that at this stage in his life, he was far more focused than he was during his younger years. After a career going up the ranks at the Auditor-General, he is today an audit manager at the Auditor-General SA’s Eastern Cape unit and is also involved in SAIGA’s (Southern African Institute of Government Auditors) board course, preparing for candidates to write their board exams.

Mbebe believes that the major difference between qualifying as a young person and doing so later in life was finding the time to focus on studying while working. During the year he passed his Certificate in the Theory of Accounting (CTA), for example, he was leading two municipal audits in different remote rural towns. It was quite difficult to travel every week to two different audits that are far apart from each other and to study a course as demanding as CTA at the same time. There are some positives to this balancing act, however − for example, the practical experience gained as audit manager on the audits of clients in the education sector assisted Mbebe with his comprehension of an APC practice case study (based on the education sector) and his overall success in the APC.

Mbebe was born in Lota A/A, a small village in Idutywa. His mother (a single parent) was a teacher and a firm believer in the value of education. She wanted him to succeed and despite hardships and less resources in their rural schools at the time, he passed matric well in the year 2000 at JS Skenjana in Idutywa, secured a scholarship with the Hexagon Trust, and went on to pursue a BCom(Acc) at the University of Cape Town.

Even as a schoolboy, his love for figures led him to think about a career in accounting, even though in his younger age he wanted to be teacher, taking great inspiration from the impact that the teachers in his village have in developing young people. Like other high achievers, he was encouraged to study medicine, engineering, or BCom(Acc).

His eligibility to register as a CA(SA) did not come easy for Mbebe. His journey started in 2001 when he went to UCT and was hoping to qualify in 2007, only to be delayed by 15 years and qualify only in 2023. He failed his CTA four times and cancelled CTA registration four times (he exhausted his CTA attempts two times and had to go back to do third year (BCTA) twice) due to the difficulty of balancing demanding work and study, but he never really gave up on his dream. ‘Never downgrade your dream to match the current reality, but upgrade your faith to match your destiny,’ he says. When he finally passed his CTA in 2018, he wrote the ITC and failed his first attempt and passed the second time around, in 2020. He proceeded to attempt APC, which he eventually passed in 2023, becoming eligible to register as a CA(SA).

As a married man with two children, he had to find a balance between work, family and his dream of becoming a CA(SA). As tough as it was, he held on to his aspirations. According to Mbebe, death is not the most tragic loss in life. The most tragic loss is what dies inside you while you are still alive. ‘I had to make sure that my CA(SA) dream does not die.’

After many years of perseverance, his academic qualifications now include a BCom(Acc) (2005), a postgraduate diploma in accounting science (BCTA 2010), an advanced diploma in accounting science (BCTA 2017), and a postgraduate diploma in applied accounting science (CTA 2018). Professionally, he has passed SAICA’s Initial Test of Competence (ITC) and the APC recently. He is also a registered government auditor (RGA) registered with the Southern African Institute of Government Auditors (SAIGA). He is currently busy with the Leadership Development Programme for Senior Managers at the University of Pretoria.

Mbebe thanks SAICA’s Thuthuka Bursary Fund, which stepped in while he was writing ITC − that intervention was life changing, he feels. He gives special thanks to his wife, family, extended family, mentors, friends, bosses, colleagues, and his employer of choice – AGSA − for the support through this journey. He is also grateful to the Endunamoo board course and UCT board course for the technical assistance during this journey.

A CA(SA) 15 years later than the anticipated date

Mbebe comments that the battle to study and hold down a job at the same time taught him determination and patience.

He wishes the younger generation could be introduced to the psychology of success (Dweck’s ‘growth mindset’) at a younger age. Those with a growth mindset believe that they can become smarter, more intelligent, and more talented through putting in time and effort. In other words, when leaners know that their minds would grow in response to challenge or failure, they are more likely to persevere when they fail, because they won’t believe that failure is a permanent condition. Mbebe wishes that learners could be taught to be ready to fail and to start all over again without breaking down or going into a deep depression.

A CA(SA) qualification changes things

Mbebe’s life journey has taught him to be resilient, to persevere and to survive. ‘I believe my growth as a CA(SA) will depend on combination of my professional qualification, my life journey and my character,’ he says. ‘My ability to nurture my emotional intelligence will be important. I am a strong believer in the growth mindset − I believe a person’s true potential is unknown (and unknowable); that it’s impossible to foresee what can be accomplished with years of passion, perseverance, toil, and training.’

He believes it is imperative for chartered accountants to stay up to date ‘because some of the clients take your word as gospel, without question. Society has a high regard for our profession. It is therefore incumbent upon us to validate and honour this privilege by keeping up to date with developments to ensure that the public trust in the profession is not misplaced.’

SAICA and the future of the profession

Mbebe praises SAICA for the new direction they are taking − the emphasis now is more on the need for CAs(SA) to be relevant and to evolve as the needs of the market unfold. The new competency framework seeks to ensure that SAICA produces entry-level CAs(SA) who can think critically and out of the box, and adapt with ease to the changing environment. There is more focus on balance between non-technical (critical thinking, business acumen, ethics and lifelong learning) and technical skills. One of the important competencies that has emerged is citizenship, which is described as the ability to display social conscience.

‘I would definitely encourage anyone to follow the profession; in fact, it’s the right time to join the profession,’ concludes Mbebe.

]]> PROFILE | Women in motoring – It is not a man’s world after all … https://www.accountancysa.org.za/profile-women-in-motoring-it-is-not-a-mans-world-after-all/ Mon, 03 Apr 2023 07:45:59 +0000 https://www.accountancysa.org.za/?p=25760

Not only is the CA(SA) profession considered by many to be a male domain − the world of motoring is seen as the pinnacle of male-ness. However, a few South African women are changing the game through grit, wisdom, and determination.

KERRY CASSEL

Improving people’s lives by envisioning, innovating and creating …

Kerry Cassel CA(SA), CEO of Motus Mobility Solutions, a leading multinational automotive group, explains that accounting was always one of her favourite subjects at school.

‘It thus seems natural that I would register for a BComm (Accountancy) when I studied at university. I also liked the broad variety of career options that would be available to me with a Bachelor of Commerce degree. At that stage, however, I didn’t know that I wanted to be a chartered accountant,’ explains Kerry.

She was fortunate enough to be given the opportunity to do holiday work while still studying. ‘Each year I would come up to Johannesburg to work at Deloitte for a month during the university holidays.’

Kerry worked on a number of audits during this time. ‘In industries from publishing to mining and manufacturing … I loved the fact that I was exposed to so many sectors of the economy, and still being undecided about my future career path, felt that becoming a CA(SA) would give me so much exposure and help me decide on my future career path.’

Never did she intend to remain in the profession. ’I always knew that I would move out into commerce after articles.’

Perseverance is the key to success

Her qualifying journey was not a smooth one. ‘First year was a breeze,’ Kerry remembers. ‘I knocked it out of the park.’

During her second year, she discovered the social side of life at university and failed. ‘I repeated my second and third years without incident. Honours, I failed.’

Kerry then had to repeat honours during her first year of articles. ‘That was really rough, but I passed. I then wrote the board exam at the beginning of my second year of articles – it was the last year that we could write both parts together. That was motivation enough for me and I passed the first time!’

In that same year she wrote the CIMA degree and passed that as well.

‘During my articles and in the time that I stayed on at Deloitte as a manager, I spent a lot of time on the learning portfolio in Deloitte, becoming a “dedicated facilitator” (essentially teaching lecturing on both technical and soft skill learning modules at the firm) and carried a reduced portfolio of clients.’

One of her biggest clients, Imperial, offered Kerry a position. Imperial later unbundled the automotive business, which was separately listed as Motus, where she still works today, more than 21 years later.

Although she has so much experience under her belt, Kerry is hesitant to describe herself as a world-class leader. ‘I still have so much to learn. I know that I was extremely fortunate to always have strong leaders and mentors at work. I was given so many opportunities to try new things.’

Her role at Motus changed constantly over the years and every new opportunity presented new challenges. ‘I was never placed in a box as a finance or accounting professional, but was allowed to move into different areas of the business – from operations to financial services, to marketing and brand management, to IT and innovation.’

Find your balance

Today, Kerry carries a diverse portfolio of responsibilities which keeps her constantly challenged and allows her to learn and develop every day. ‘I get to meet and interact with so many talented people every day and I learn from people around me. This keeps my thinking current and relevant.’

Currently, her main struggle is balancing her work responsibilities with her responsibilities at home. ‘I am a wife and a mom, and that is a very important part of my life.’

She believes, however, that working for a single employer for most of her career has helped her in this regard. ‘I think that I had the opportunity to earn my stripes and prove myself. This gave me a degree of flexibility and I always tried really hard to be there for all of the important moments in my children’s lives.’

She also knows a supportive husband and extended family is essential for any woman wishing to balance a career and family responsibilities. ‘You need a strong support network. This includes family, friends, your spouse, executive assistants, and support at home.’

Not only surviving but thriving in a so-called male-dominated industry depends on quite a few variables, according to Kerry. ‘If you have a supportive boss or mentor, it can make a massive difference. An inclusive corporate culture and colleagues also play an important role.’

Kerry realised over the years that she brings a unique, invaluable perspective to the workplace. ‘My contribution to the team is the perspective that I bring to the table, which is sometimes different from the view of my male colleagues. It took me a while to define what that different perspective is and why that adds value to the team. I sometimes think that it is easier to just try to fit in and be the same and in doing so, can sometimes lose that very essence that differentiates you.’

BRONWYN KILPATRICK

Going places and leading the way

Another woman taking the motoring world by storm is Bronwyn Kilpatrick CA(SA), CFO of Toyota South Africa.

‘As a youngster, I was particularly good at mathematics and accounting. Like so many, I performed a battery of aptitude tests which gave some direction to me on where I should consider.’

Becoming an engineer or a doctor was high on the list. ‘However, I wanted to progress into the business world, and the research I performed always led me towards the accounting degree,’ says Bronwyn.

The CA(SA) qualification was then (and still is) very highly regarded and well recognised globally. ‘It also seemed to be the perfect platform for me to really do whatever I wanted to do. Becoming a CA(SA) was merely the door opener to be what I wanted to be.’

Luckily for Bronwyn, her qualifying journey was relatively straightforward. ‘I attended the University of KwaZulu-Natal, where I received my BCom and BCom Honours.’ She then joined the Deloitte office in Durban to serve her articles and was part of the first group that wrote the board exams where Parts 1 and 2 were split. ‘I was fortunate enough to pass all my exams the first time.’

Bronwyn also enjoyed her experience at the Durban office of Deloitte immensely. ‘I was fortunate to have some of the best mentors and clients which gave me the right experience!’

There were several important lessons Bronwyn learned along the way. ‘Firstly, mindset is such a big part of who you are and how you develop into a leader,’ she explains. Secondly, she learned the importance of setting goals. ‘Stating a bit of the obvious, but I set some very clear goals and I knew that it was not going to come easy. Hard work and long hours were part of the recipe.’

Teamwork leads to success

For her, it is also important to understand the principles and values that drive her. ‘When you are strong and clear on these, it helps with dealing with grey areas and brings a certain calmness to your team.’

Aligning these principles and values with your team goes a long way. ‘Some key principles and values are honesty, respect, integrity, always do the right thing no matter the consequence – this you can manage.’

Bronwyn endevours to wake up every day with the mindset of learning, unlearning, and relearning. ’You also have to be humble, knowing that there are many people in your team and organisation who know more than you on many different topics. Be curious and learn – your team will start to follow you when they see this.’

She also knows it is impossible to achieve success on your own. ‘You cannot do it by yourself; you can only do it with your team. Trust your team and bring a level of accountability with this trust. Most times, they will hold each other accountable. Collaborate with your team, and be reflective, if you have got it wrong, then change it and fix it.’

It is therefore imperative to build relationships, not only within your own team but also with external partners of the organisation. ‘Intentional communication is key. Your team wants to hear from you, and they want to hear from your regularly. It is not always about the big presentations, but always needs to be intentional.’

Always have a learning mindset

Bronwyn encourages a ‘bad news first’ approach in her organisation. ‘This way you will be able to quickly action and put in the necessary corrections that are required.’

When Bronwyn moved from a professional services environment to the world of commerce 15 years ago, it was a big change. ‘It was a slight shock to the system,’ she admits. ‘But honestly, I have learned things that I would never have done so had I not left. Resilience was key during this transition, and I had to prove to myself that I could do it.’

Building up your own credibility again with a new team always comes with its challenges. ‘But this is how you learn, both personally and professionally. Again, if you have the mindset of learning, struggles merely become learning points and can be turned into a positive point.’

Being one of the big players in the auto industry is not something Bronwyn takes lightly. ‘I think that the most difficult thing is really to work your way through the complexity that comes with the auto industry. This is not a simple beast. Once you understand this, your stakeholders, and your contribution, it becomes easier to navigate and thrive. But these all take time, and the steps you need to take need to be intentional. And of course, come to work every day with a learning mindset …’

Bronwyn’s advice to other female CAs(SA) who want to charge forward and change the world, is to believe in yourself. ‘The world is changing. Abnormality and uncertainty are the new norm. To deal with this, businesses need to hear a diverse set of views and opinions. Back yourself, and never stop learning!’

]]> Profile: BR Whitaker & Co https://www.accountancysa.org.za/profile-br-whitaker-co/ Wed, 01 Mar 2023 04:00:36 +0000 https://www.accountancysa.org.za/?p=25667

BR Whitaker & Co is a small accounting business based in East London that celebrates its 90th anniversary on 1 March. The business was established back in 1933 by Bernard Rolfe Whitaker, and for four generations the eldest son has gone onto become a CA(SA) and work for the family business.

4 Generations of CAs(SA) – 90 years of accounting

BERNARD ROLFE WHITAKER

Bernard was born on 4 April 1907. He matriculated at St Aidan’s, Grahamstown, and after working for an accounting firm, Whiting and Griffin (eventually KPMG), for about nine years, Bernard decided to start his own practice, BR Whitaker & Co. He also opened a practice in Idutywa and served the Transkei area. He is described as being somewhat of a tax expert with some of his tax cases being published. At the time of his retirement in 1994, he was believed to be the oldest practising chartered accountant in South Africa. He passed away at the age of 90 in 1997. ‘I think it’s fair to say that in those days you did not specialise in a particular field and he was an accountant, auditor, tax specialist and executor of many estates,’ says Andrew Whitaker, who joined the family business in 1981.

It goes without saying that a lot has changed over the last 90 years. The advancement in technology is the first thing that comes to mind. Another thing is that a lot more clients are able to do things in-house, reducing the scope for our service offerings. ‘On the other hand, a lot of things have remained the same,’ says John Whitaker who joined the family business last year. ‘We are still committed to professional excellence – offering a very good service at a fair price. Our core values of honesty, reliability and loyalty have also not changed over our 90-year history. ’When John Whitaker started his articles in Johannesburg, he made an exciting discovery. His grandmother (Patrick’s wife) gave him a desk to use that his grandfather and great-grandfather had used whilst completing their articles. The one drawer had been locked for about 80 years, and one day he managed to pry it open and uncover some of Bernard Whitaker’s old papers, including his final board exam that he wrote in 1930.

Patrick Rolfe Whitaker

Patrick was the oldest son of Bernard and was born on 22 October 1934. Like his father, Patrick also completed his schooling at St Aidan’s, Grahamstown, going on to qualify as a CA in 1967.

Described as somewhat of a visionary, Patrick saw the use of computers as the future of accounting, and in 1980, BR Whitaker & Co was the first accounting practice in East London to acquire a computer − a huge Olivetti about the size of a desk, with a built-in dot matrix printer. This enabled the practice to offer the service of processing debtors and printing statements as well as processing cashbooks, although they still had to be reconciled manually.

An astute businessman, he added fraud investigations to the firm’s repertoire as well. He retired in 1988, some six years before his father, to concentrate on running a hotel that he had purchased, together with his middle son. He passed away in 2002.

Andrew Rolfe Whitaker

Andrew is the oldest son of Patrick and was born on 23 November 1960. Andrew matriculated at Christian Brothers College, Kimberley, in 1978 and then completed two years’ national service at 1SAI and 61 Mechanised Battalion. He started articles with the firm in 1981, studying a BCompt and BCompt (Hons) through Unisa and passing the board exam in 1987.

Andrew spent a few years out of the profession, returning on 1 March 1990. 33 years later, he is still at BR Whitaker & Co.

‘Obviously there have been huge changes − computers everywhere, special software developed and improved over recent years and the introduction of VAT in 1991, had a huge impact of the services that we have provided. Where for most of the earlier years a big portion of the work performed was writing up and reconciling cashbooks, posting to general ledgers, etc, etc, in-house computing evolved the practice to far more of a consulting nature, although I have continued with fraud/theft examinations and giving expert evidence in court cases involving financial matters. We are fortunate to have retained a client base, a big portion of which dates back a couple of generations.’

John Rolfe Whitaker

John was born on 18 March 1990 He went on to matriculate at St Andrew’s School, Bloemfontein, in 2008. He first completed a BComm (Economic Sciences) at Stellenbosch University, then commenced working as a financial manager for a small manufacturing entity whilst studying accounting part-time. He qualified in 2018 while doing the TOPP programme for a Johannesburg-based company. Before joining BR Whitaker & Co, he worked as the group financial manager for a property management company as well as a residential housing developer.

‘A part of me always wanted to be part of the business. I must have been six when I joined my father on my first stock take. The highlight for me before I got to primary school was to go away with him for a work trip to some small Eastern Cape town.’

‘I think the main change that I will be implementing is around the marketing component. Historically, chartered accountants didn’t really advertise, and it was not really required. The ethos was more focused on doing the work and that the rest will follow. Historically, our competition was other chartered accountants, and everyone was pretty much prohibited from advertising. Our nature is such that we don’t like to draw too much attention to ourselves and believe that the work we do should speak for itself, which can sometimes feel like an obstacle to getting new business.’

THE FUTURE

Each generation has been unique in what they have brought to the business, and whilst in some ways, a lot of things have changed over the last 90 years, the important things, such as ethics and integrity, have remained the same.

When asked where he sees the business in 10 years’ time, John Whitaker says his hopes are high that they will still be going strong − they’ve stuck it out for 90 years – and that it can only go from strength to strength.

]]> Profile: Public sector: Polani Sokombela https://www.accountancysa.org.za/profile-public-sector-polani-sokombela/ Wed, 01 Mar 2023 04:00:19 +0000 https://www.accountancysa.org.za/?p=25659

Polani Sokombela was appointed chief financial officer (CFO) at the Auditor-General of South Africa (AGSA) in March 2022. A seasoned CA(SA), he has worked his way up through the AGSA ranks since starting his career as a trainee accountant at the organisation in 2007. His impressive career highlights the success of the AGSA’s training and succession strategies, which are producing high-calibre leaders from within its ranks.

Fertile ground for those who seek to learn

Polani grew up in Tsolo in the Eastern Cape where his role models were teachers, nurses and doctors. He knew nothing about accounting and focused his studies on maths and science. It was only when the principal of his school, whose son was studying accounting at the time, told him that doing a BComm would be the start of a promising and lucrative career that he gave it a thought.

In high school, however, accounting was not on offer. After completing his matric he went to Walter Sisulu University (then the University of Transkei) where his parents wanted him to study medicine. Accounting was his second choice, but he was accepted and eventually became a CA(SA) ‘by accident’, he says. His parents were unimpressed at first and offered little support. They were convinced that he was wasting the money they had saved for his studies by doing something they had never heard of. That first semester was daunting.

But then his parents heard a show on the radio that focused on accounting as a career, and everything changed. After graduating, he joined the AGSA as a trainee.

‘I have always been an activist,’ he says. ‘While doing my Honours in 2006, I received an invitation to a cheese and wine party from the Provincial Auditor-General of the Eastern Cape. I had met with various firms, but it was the AG’s mission statement that resonated with me: to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. As someone who wanted to contribute to the country, it was exactly what I was looking for.’

He joined the Pietermaritzburg office, and his sense of purpose grew more intense with each year. Surrounded by professionals in various fields, he took responsibility for his learning and growth as a trainee accountant, and for developing competencies in areas like auditing, financial management and reporting, taxation and more.

‘I asked managers questions all the time,’ he recalls. ‘I was always raising my hand when a project came up to ensure that I had as much exposure as possible. My focus was all on technical skills.’

After qualifying, he realised that while his subject matter expertise was solid, he had to learn soft skills too if he wanted to become a leader.

‘I recognised that I was unable to filter my language when speaking to people, and could be too harsh, so I set out to learn how to be a better communicator and to become more self-aware as I was moving from management to senior management roles. It was about learning to handle what is known as “the anatomy of emotions”, understanding what the weaknesses and strengths were of those in my team and knowing how to play to those.’

What is unique about the AGSA, he says, is the opportunity to engage with high-profile people. That requires you to sharpen your verbal and written skills and demonstrate that you have high-level accounting expertise as well as the ability to understand people who represent the citizens of the country. Your messages therefore need be to simple, clear and relevant.

Polani joined the University of Stellenbosch where he completed a senior management programme which taught him more about being a generalist, including topics like marketing, strategic thinking, human resources, communication, leadership, economics and more. After that, he signed up for an executive development programme at the University of Cape Town. This focus on honing his soft skills, which was supported by the AGSA, he says, is the reason he rose to the position he holds today.

He admits that he was not always a good student and that he failed several courses on his journey to becoming a CA(SA), but concludes that failure taught him resilience. He learnt to never stop trying and to use poor results to acquire new wisdom.

‘I recently learnt a new concept – that of being anti-fragile,’ he says. ‘It means that something does not merely withstand a shock but actually improves because of it. Basically, what does not kill you makes you stronger.’

His advice to young people is that while money is important, it’s also vital to have a purpose in life. If they do have a sense of purpose, they need to ensure that they find a way to contribute to society.

‘The public sector is not easy,’ Polani adds. ‘There are many challenges and governance failures. Professional scepticism – having a questioning mind and being alert to anything that may indicate misstatement due to error or fraud – is critical. We must be able to hold those that have been given the responsibility of managing public finances accountable. If you work for the AGSA, you need to keep the ordinary people of this country top of mind. We have much that needs to improve and that can only be achieved if we use public funds appropriately.’

His goals include ensuring that the AGSA remains commercially viable and sustainable and financially independent. Leading by example, he maintains, is vital.

At the top of his agenda is the digital transformation of the office of the AG to increase working efficiencies and free up employees from mundane tasks.

‘We are running this institution like any other audit practice, and we charge fees for our services. Adopting new technologies and driving our bold #CultureShift 2030 strategy will require us to focus on training more auditors and working to achieve a culture shift among a critical mass of auditees across the value chains that deliver water and sanitation, human settlements, infrastructure, and energy, including the metropolitan municipalities, so that there is a direct, meaningful, and consistent impact on ordinary South Africans.’

Talent management is critical in the public sector, and he aims to ensure that when he leaves there is an internal successor in place. ‘The ground here is very fertile,’ he notes. ‘We are surrounded by CAs(SA) who work at the coal face and there is no better educational environment for those with a commitment to serving others.’

Author
Monique Verduyn

]]> Profile: Jody Baumgarten https://www.accountancysa.org.za/profile-jody-baumgarten/ Wed, 01 Mar 2023 04:00:14 +0000 https://www.accountancysa.org.za/?p=25674

Motivated by the love of solving complex problems in his childhood, Jody Baumgarten, CFO of Wonga, has successfully built a thriving career in the fintech space. He speaks about business, trends, hobbies and mental wellness.

Heading up a fast-paced Fintech company

Jody currently leads as CFO for the dynamic fintech company Wonga, where he maintains regulatory compliance and core systems to the highest industry standards.

Jody completed his articles with PwC and worked for Dubai World Holdings until an opportunity to join Wonga surfaced in 2011. In 2019, Jody and his two colleagues bought Wonga South Africa, as it was previously a subsidiary of the UK group.

Over the years, Jody has been responsible for many different divisions within Wonga. Some successfully and some with a little less enthusiasm. As CFO, he is currently responsible for the finance, treasury, collections and planning aspects of the business, and making sure that they have competent people on their team that can be trusted to apply themselves to their fullest.

‘I like to give people freedom and flexibility, allowing them to use their own initiative to figure things out and come up with their own solutions to complex issues. I avoid micro-managing people at all costs,’ says Jody.

Tell us more about Wonga in South Africa and what inspired you to co-found it?

Wonga Online is a South African online lender that was formed in 2019 by the executive team of the previous entity owned by the Wonga international group. The management team in South Africa recognised an opportunity to acquire the South African operations trading under the Wonga brand.

As co-founders, we were inspired to re-establish Wonga in South Africa because we saw a need in the market for a locally owned and managed business that could provide short-term bridging finance to customers who were facing short term financial challenges. We wanted to offer a service that was both accessible and responsible.

To achieve this, we have implemented a data-driven approach to ensure that our business is stable and sustainable, while still meeting our customers’ needs. We have focused on responsible lending practices, and we are committed to providing customers with transparent information about the costs and terms of our loans.

Overall, we believe that Wonga Online is making a positive contribution to the financial landscape in South Africa, and I am proud to be part of a team that is committed to responsible lending and financial inclusion.

Tell us how you manage a fast-growing fintech company and still enjoy life?

I am both a husband and father. I enjoy adventurous sports like open water swimming and mountain biking, with my most recent quest being my swim from Robben Island to Cape Town. I have completed challenges like Ironman, the Absa Cape Epic and a solo mountain bike ride across Rwanda.

I really love setting myself a physical challenge that seems out of reach, and then spending a couple of months training for it. With proper training and the right mental attitude, there is little that one cannot overcome.

For me, mental wellbeing is top priority as the demands of contemporary life can be exhausting with continual online connectivity. This has made it near impossible to take time off or to switch off completely. Therefore, it’s crucial that we maintain balance in our daily lives.

Managing the pressures of running a fast-growing fintech company is challenging. Outside of the office, I try to balance spending time with my young family and training for the next big sporting event that I enjoy. I can really get my mind off work when I’m riding my mountain bike or swimming across the bay.

I consistently strive for work excellence through results-focused output. This helps me focus on the end goal and helps build consistency.

Tell us what your thoughts are regarding trends in fintech?

After the pandemic, the acceptance of digital and uptake in online commerce has increased dramatically. More and more people are expressing a desire to carry out all of their activities online. Another emerging trend in fintech is that people are under financial stress as a result of inflation, increases in the repo rate and general increases in the cost of living.

Accounting tech platforms that are constantly evolving are automation and forecasting tools. I believe more and more areas of accountancy will be automated over the coming years, so getting a grip on technology is crucial.

How can one stay abreast with technology?

With so many developments in tech, it can be hard to keep up – however, at Wonga, we have built a great team of experts that keep us at the forefront of technology. The recent emergence of useable AI and machine learning are changing the credit space for the better, allowing the underbanked to enter the credit market, which helps drive financial inclusion. We have focused on a few critical capabilities and have taken on a rapid adoption approach, meaning we are able to integrate with specialists in various technology fields which allows us to focus on what we are really good at.

From a personal perspective, I follow a few technology publications and podcasts to keep up with the changes in the tech space, particularly from a data and credit point of view.

What is your message to younger self?

If I had to rewind a few years, I would have gotten more involved in some of the business opportunities that came my way. As much as these may have been riskier than the prospect of a guaranteed salary, the potential upside is massive. Back yourself!

What is your message to aspiring CAs?

My message to aspiring CAs is to consider the breadth of exposure to other areas in business besides traditional accounting; things have changed from what you might learn in formalised education over the years. You might be working on year-end financials one minute, and then working on a tech platform purchase the next.

Additionally, be open to learning from those who have accumulated years of experience and hold your opinions lightly. Be willing to learn.

]]> Profile: Neil Morris – The rise of ESG Reporting https://www.accountancysa.org.za/profile-neil-morris-the-rise-of-esg-reporting/ Wed, 01 Mar 2023 04:00:13 +0000 https://www.accountancysa.org.za/?p=25663

Monique Verduyn asked Neil Morris, Global Head of Assurance and ESG Methodology at KPMG, what the increased pressure on organisations to integrate ESG in their strategies, manage ESG-related risks and report ESG matters means for the profession.

Environmental, social and governance (ESG) reporting is a rapidly growing field for chartered accountants. Investment funds with tens of trillions of dollars in assets are using ESG principles to make investment decisions.

By incorporating ESG reporting into financial reporting, companies can provide investors with a more complete view of a company’s performance, which can help them make more informed decisions about their investments. In addition, ESG reporting can help companies identify potential risks and opportunities and develop strategies to address them, which can lead to long-term business success.

Neil Morris, the Global Head of Assurance and ESG Methodology at KPMG, is a CA(SA) with 24 years’’ experience at KPMG in South Africa and the United Kingdom. His expertise includes risk management, climate change and sustainability, financial audit, and assurance technical support. He is also a member of SAICA, and a registered auditor with the South African Independent Regulatory Board for Auditors (IRBA). He has served on various committees and working groups for both SAICA and IRBA.

‘One of the many advantages of being a CA(SA) is that it gives you access to the international stage,’ Neil says. ‘Several years ago, well before ESG assurance became what it is today, a few of the senior partners asked if I would lead our climate change and sustainability practice. It sounded like an extremely interesting challenge to take on.’

The business unit’s early focus was on environmental liabilities., It was through that work, which included determining closure costing liabilities, that Neil and his team began to focus on other ESG questions.

‘We initially focused on sectors that have more direct impacts on the environment. We also focused on health and safety of employees and communities affected by operations. From a governance and social perspective, we learnt a lot, and we were able to apply these learnings to organisations where ESG is less immediately tangible such as banking, for example. From these early encounters, the business unit grew.’

‘ESG represents incredible opportunity and huge responsibility for the profession,’ says Neil. ‘I believe it would be impossible to attract and retain top talent in today’s environment if we were to ignore the fact that across industries, geographies, and company sizes, organisations have been allocating more resources toward improving ESG. Investors are increasingly considering a company’s ESG characteristics alongside its financial attributes when making investment decisions. It’s also a deeply interesting subject matter. I recently met with a retired partner who has been drawn back to work because he finds the ESG angle so interesting. At KPMG we have a queue of people – from graduates to managers – wanting to get involved.’

Maintaining social licence

The need for companies to understand and address ESG is becoming essential to maintaining their social licence. ESG has applicability across the globe to every organisation, industry, and sector, whether public or private. These matters should not be seen in isolation as they penetrate every aspect of business including strategy, policies, risk, and day-to-day operational considerations.

‘The concept is not new,’ says Neil. ‘Although initially slow, developments in the ESG space have accelerated recently, and now the conversations are happening with CEOs and organisational leaders – and taking place in boardrooms. We know that assurance will lead to better information being disclosed which, in turn, will lead to better decision- making and actionable strategies that will take us down the correct path.’

Working towards a global framework

Organisations need to be able to execute ESG strategies in a structured manner. An ESG gap analysis can provide them with an understanding of existing efforts that fall under the ESG framework, as well as allowing them to consider additional factors that form part of the ESG risk assessment into the future. This can lay the groundwork for a transformation roadmap and provide those charged with governance with a clear understanding of ESG implications and the manner with which ESG dovetails with the organisation.

‘From a reporting perspective, professional bodies have dedicated considerable time to the structure of reporting frameworks. The next layer is regulation, which may differ from country to country when it comes to information disclosure and data calculation.’

Given that the International Financial Reporting Standards (IFRS), developed and maintained by the International Accounting Standards Board (IASB), govern how particular types of transactions and events should be reported in financial statements globally, achieving that level of buy-in and standardisation for ESG reporting is key.

‘We want to make sure that the risk of fragmentation is limited and that we develop a leading global sustainability assurance standard that can be followed by practitioners around the world,’ he says Neil.

Neil became a board member of the International Auditing and Assurance Standards Board (IAASB) in January 2023, where his responsibility is to work with his fellow members serving the public interest by setting high-quality auditing and assurance standards. ‘My main priority is working with the sustainability task force to draft the International Standard on Sustainability Assurance.. We are looking forward to sharing an exposure draft during this year and a final approved standard by the end of 2024. For me, that would signal incredible progress. We are seeking to bring some of the practical experiences we have had from performing assurance over a number of years to develop a robust assurance standard to support the type of decision making we´re going to be seeing in the future.’

With the increasing importance of ESG information to investors and wider society, Neil says there is enormous opportunity for CAs(SA) who have an interest in furthering their understanding of ESG.

‘When I see the seriousness with which the leadership of so many organisations is taking ESG, it’s very clear that this is becoming a mainstream area of focus for the accounting and audit profession. I would recommend that newly qualified CAs(SA) especially take every opportunity to learn and gain experience in this area, whether you are preparing financial information or auditing that information, members of our profession have a significant role to play.’

He finds it exciting that chartered accountants have the opportunity to engage with engineers, environmental scientists and social scientists, and other professions on ESG matters.

‘We are not on our own here,’ he says. ‘Instead, we get to bring our skill set to the party, as well as gain valuable insights from our peers in other sectors. It is truly a mind-opening experience and a wonderful opportunity for those of us who are working to develop an ESG framework for the future.’

Author
Monique Verduyn

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