TRANSFORMING THE AUDITING PROFESSION
The phrase, “I want to be an auditor when I grow up”
has probably never been uttered in a primary school anywhere in the world. Unlike the medical and legal professions, there are no TV shows set in auditing firms. But the auditing profession is undeniably crucial, protecting, as it does, the integrity of our financial markets by independently verifying the financial statements of businesses on behalf of the general public. Growing the profession’s numbers remains a challenge generally, and in South Africa we are faced with a further challenge – how to attract greater numbers of black and female auditors to the profession.
The Independent Regulatory Board for Auditors (IRBA) has been concerned for a long time about the shortage of black auditors in South Africa.
There is huge scope for more people from this demographic to take the challenge to become a Registered Auditor, and it’s a particularly auspicious time to follow this career path as financial skills are in very strong demand in South African with salaries and job prospects rapidly growing; not just in the auditing firms but in private and listed companies as well as the government sector.
The profession offers the best of both worlds – an opportunity to contribute to the public interest by overseeing the integrity of people’s investments and financial affairs, as well as being a profession whose members are well-paid.
I would like to encourage more young black people from all over South Africa – and all backgrounds – to pursue the Registered Auditor (RA) designation if they have a strong belief in good ethics and are seeking a highly regarded professional qualification.
South African RAs can also feel confident that the qualification is recognised the world over because of the high auditing and accounting standards in this country.
The IRBA sets and marks the Public Practice Examination (PPE) which is the final test of professional competence for qualification as both an RA and a Chartered Accountant (CA).
The aim of the PPE is for candidates to demonstrate an ability to solve multi-disciplinary practical problems in an integrated manner and to do so must analyse and interpret information and provide viable solutions to address specific client needs. The ability to demonstrate logical thought and exercise professional judgment is an integral part of the exam.
As part of its drive to ensure more skilled and qualified accounting professionals are available to meet the urgent needs of business and the auditing profession, the IRBA has developed a support programme for candidates who have not passed the PPE. Candidates who participated in the 2007 support programme had a higher pass rate in the PPE than those who did not.
While the numbers of black candidates are increasing and progress is being made, it’s not happening fast enough because we are coming off a very low base. We still need many more people to take up the challenging but highly rewarding auditing career path. Hopefully many of these people that passed the exam will register with the IRBA and become RAs now that they are eligible.
The support efforts of SAICA through their Thuthuka project must also be acknowledged as a solid foundation to transforming the profession. In order to continue the good work being done by SAICA with respect to Thuthuka, the IRBA has committed to set up a support programme for Thuthuka graduates in their preparation for the PPE.
An historic opportunity exists for young black people with an interest in finance to become auditors given the growing demands for specialist financial skills. South Africa needs qualified auditors and accountants to continue to grow and support the economy, so that the ultimate result of a better life for all can be achieved.
Kariem Hoosain CA(SA), MBA is the outgoing CEO of the IRBA.
SPECIAL REPORT – THUTHUKA
THUTHUKA BURSARY FUND
Thuthuka, the initiative launched by the South African Institute of Chartered Accountants (SAICA) six years ago, is proving to be a remarkable success.
Targeted at boosting the numbers of black South African chartered accountants [CAs(SA)], Thuthuka is a holistic programme designed to nurture promising black students from high school, through university and, ultimately, to prepare them for their qualifying examinations towards becoming CAs(SA).
“If success is measured in terms of tertiary education results – as indeed it should be – then Thuthuka has not only met but surpassed our expectations,” says Chantyl Mulder, SAICA’s Senior Executive: Transformation.
An overview of the 2007 university pass rates of Thuthuka-sponsored students reveals that an impressive 88% got through their first year examinations, 82% passed second year and 67% passed third year.
“These statistics are well ahead of the national averages,” says Nthato Selebi, Thuthuka Bursary Fund Manager. “Bear in mind that given the extremely demanding nature of the course, pass rates are low. In this light, our students have done extraordinarily well.”
He points out that 2007 saw the first group of 43 Thuthuka students graduating, equivalent to a 70% pass rate. Of the 43, seven were from the University of the Witwatersrand, 12 from UCT and 24 from the University of Johannesburg.
“Based on a 70% pass rate projection, we anticipate that 127 Thuthuka Bursary Fund students will be writing examinations at honours level in 2009,” says Selebi, who maintains that the Thuthuka success rate could have been even greater had more black students been passing higher grade matric mathematics.
“There is just not a sufficient number of African learners who pass matric mathematics at the higher grade. Accordingly, there are not enough students meeting the required standard – which is why we were only able to award 271 bursaries in 2008, well short of the targeted 300.”
He urges high school learners to apply themselves more diligently to their core mathematics studies, stressing that it opens doors to the most sought-after of professions.
The number of Thuthuka Bursary Fund learners to have benefited from the fund since its inception currently totals 703, versus 502 a year ago.
“Encouragingly,” says Selebi, “we seem to be attracting stronger candidates each year.
The Eastern Cape, with 67, accounted for the largest 2008 provincial intake of the total 271 students, followed by KZN (65), Gauteng (54), Western Cape and Limpopo (26 each), North West (13), Mpumalanga (9), Northern Cape (7) and Free State (4).
Ignatius Sehoole, SAICA’s Executive President, emphasises the critical role that Thuthuka plays in generating qualified skills: “By promoting chartered accountancy as a career of choice among outstanding individuals from previously disadvantaged societies, we are creating a hothouse for talent that will contribute successfully to the effective and sustainable transformation of the South African economy.”
The Thuthuka Bursary Fund awards bursaries to high achievers from previously disadvantaged backgrounds to pursue chartered accountancy careers. The fund draws support and donations from individuals, the accountancy profession and donor companies in commerce and industry.
The fund is governed by several independent trustees representing the industry, professional firms and government – with a view to obtaining input from all the key stakeholders.
The universities are a critical component, says Mulder.
“We said to them we are going to work with cohorts of students. Cohorts work. So we want to place a cohort with you of 50 students at a time. We want accommodation. We want a project manager. We want our students to receive extra tutorial support. And also, in addition to the technical core, critical to us are life skills. We want our students to be confident enough to be valuable from the day they go out into the business world.”
Is this approach effective?
In addition to the academic results actually being achieved by Thuthuka Bursary Fund beneficiaries, the students themselves, not surprisingly, laud the programme and what it has done for them.
Sibusiso Mlangeni, a first year university student, tells of how he obtained his education from a township school. “I was fortunate, firstly, to have been blessed with a facility for mathematics and, secondly, to have heard of Thuthuka. I now feel confident that my foot is on the first rung of a ladder that will result in my realising my dream of becoming a chartered accountant.”
Sindile Mpanda, a third year university student, also the product of a township school, cannot speak highly enough of the “splendid” all-round support that has been forthcoming from Thuthuka.
Sehoole is highly gratified that Thuthuka is showing clear signs of bringing to fruition SAICA’s objective of making a contribution that will truly make a difference.
“SAICA is rated as a leader among the world’s accounting institutes. And as one of the primary sources of South African business acumen, leadership and know-how, it plays an important role in this country’s unique economic dynamic, by helping to create an economic leadership that truly reflects the diversity and reality of broader society and at the same time strengthen the economy as a whole.”
SPECIAL REPORT – THUTHUKA
CHARTER ACCELERATES TRANSFORMATION
The chartered accountancy profession’s Broad-based Black Economic Empowerment (B-BBEE) Charter clearly supports the profession’s commitment towards transformation.
With the signing of the CA Charter now accomplished, the next step is for the council to reflect on how the profession plans to realise its vision of creating an environment in which we continue to grow our economy while facilitating effective transformation. As we do this, we must also ensure that we never allow our standards to drop.
Underlining this quest is a keen awareness of the critical need to develop skills by increasing the number of black (especially black women) Chartered Accountants [CAs (SA)] in South Africa.
Since 1976, only 973 Africans have completed the requirements to register as a CA(SA); a number that compares unfavourably with the total number of CAs(SA) registered with SAICA to date. This is one of the key activities the CA Charter aims to address.
The CA Charter, together with all its stakeholders, agree that active, large-scale intervention is required, and that CAs(SA) have a duty to support B-BBEE. The Charter counsil has therefore been tasked with the responsibility of driving and monitoring the implementation of the Charter, which details various initiatives that seek to deliver a successful B-BBEE programme for the benefit of all CAs(SA).
While the profession has long been committed to transformation drives prior to the signing of the CA Charter, progress in this area has been slow, but it has enjoyed several successes with a number of programmes and projects driven by SAICA (through Thuthuka) and other professional bodies like ABASA.
Through Thuthuka, for instance, the intake at South African universities shows that the rate of prospective African CAs(SA) is climbing steadily. More females than males are passing the qualifying examination and the number of female CAs(SA) has risen by 65% during the past five years.
The pipeline is looking increasingly transformed, with each race group moving identifiably toward reflecting the nation’s demographics. From 2003 to date, the number of African CAs(SA) has grown by 141% compared with the 24% increase in the total number of CAs(SA) over the same period.
Thuthuka thus, has played a pivotal role in accelerating the development of African CAs(SA).
The Charter Council is confident that the widespread support of the Charter by the profession will strengthen these encouraging trends and accelerate our exciting journey towards sustainable transformation.
In order for the country’s economy to grow on a sustainable basis, with wealth creation benefiting the entire population, it is important that sound economic principles underlie the implementation of BEE initiatives. CAs(SA) are therefore encouraged to implement the Charter in ways that work for them and their respective businesses.
The Charter will create an opportunity for businesses to look at their own procurement in the light of their own scorecards to ensure that they remain competitive.
Most importantly, the CA Charter aims to recognise the role that all chartered accountants play towards contributing to the supply of CAs(SA) in the profession.
That said, the 12-member Charter Council will focus on assisting members in applying the Charter from 2008 to the end of 2016 and to address various concerns as they arise.
The Charter deals with each of the seven key elements that form the pillars to Broad-based BEE in the profession. These are:
- Ownership;
- Management control;
- Employment equity;
- Skills development (SAICA members supporting Thuthuka stand to benefit significantly);
- Preferential procurement;
- Enterprise development (support for The Hope Factory will add 15% to BEE scorecards); and
- Socio-economic development.
The CA Charter will apply the same weightings, with a minimum of deviation, to these elements as contained in the country’s Code of Good Practice.
The next few months will witness the CA Charter Council endeavouring to address any of the profession’s concerns, especially with regards to the CA Charter’s implementation and its seven key elements. The Council will do so through a series of communication efforts primarily in the form of an electronic newsletter.
The CA Charter representatives are:
- Liza Wood (Small Practices)
- Sathie Gounden (Black Firms Forum)
- Sindi Koyana-Mabaso (Big 4 firms)
- Philip Hourquebie (SAICA)
- Tsakani Matshazi (ABASA and Council Chairman)
- Lesego Sennelo (AWCA)
- Professor Mike Wormald (Academics)
- Deane lo Ning (Trainees)
- Lindelwa Jabavu (Auditor-General)
- Leonard Brehm (Medium Practices)
- Kariem Hoosain (IRBA)
- Sizwe Nkosi (Commerce & Industry)
Tsakani Matshazi CA(SA) is the chairperson of the CA Charter Council.
SPECIAL REPORT – THUTHUKA
THUTHUKA MATHEMATICS CAMP NURSERY
An innovative pilot project designed to enhance the mathematical potential of senior secondary school learners has evolved into a fully-fledged country-wide, broadly-funded initiative.
Six years ago, the South African Institute of Chartered Accountants (SAICA), determined to boost the throughput of desperately needed black accountants, created Thuthuka, the several projects of which included addressing the issue of literacy and numeracy at secondary school level.
Chantyl Mulder, SAICA’s Senior Executive: Transformation, says the huge success of the Thuthuka initiative is clearly reflected in the Thuthuka-sponsored students’ 2007 university pass rates.
“An impressive 88% got through their first year examinations, 82% passed second year and 67% passed third year,” says Mulder. “These statistics are well ahead of the national averages. Our students have done extraordinarily well, with the ongoing provincial training camps having played an important role.”
She references the 2004 matric results as a primary motivation for the camps.
“In 2004, 467 985 learners wrote senior certificate, of whom only 39 939 wrote higher grade mathematics. Among that number, 24 143 passed, a paltry 7 236 of whom were African.”
A strategy for the improvement of learner achievement had been in place since 1999, but recently a national forum for learner attainment had been established in order to address improvement of the pass rate of matriculants.
Other issues requiring attention stemmed from this forum, such as how to improve the motivation and performance of girls, and how to improve the performance and interest in so-called gateway subjects like science and mathematics.
Thuthuka’s demonstrable success formula, gauged by the outstanding academic results achieved by those targeted by the programme, has generated enthusiastic support among other stakeholders interested in creating tertiary education-ready learners.
Thus, the Department of Science and Technology (DST) is now funding eight provincial training camps annually in the Western Cape, Free State, Eastern Cape, KwaZulu Natal, Gauteng, Limpopo, Mpumalanga and North-West, with the addition of science to mathematics as an academic subject.
SAICA partly funds the camps, with the DST providing the balance, an undertaking to which it has committed itself to the tune of R25-million over five years.
The main aim of the camps is to target some 1 400 grade 11 and grade 12 learners a year, selected on the basis of their mathematics, science and accounting potential. The learners are then encouraged to choose either accounting or the SET professions (Science, Engineering, Technology) as a career.
Financial support, over and above the funding provided for the camps, is offered by way of full-time tertiary education via the SAICA-administered Thuthuka Bursary Fund and other funders.
In addition to the DST and SAICA, the Department of Education, private sector organisations, and accounting and engineering institutions all play a key role in the project.
The objectives of the camps are to:
- assist learners to obtain and enhance the skills required to achieve a post-matric career and study choice successfully, and include numeracy, goal-setting, decision-making and career planning;
- encourage learners to obtain better marks by improving their aptitude in mathematics, science, accounting and English;
- improve the skills of educators in the targeted subjects;
- promote the engineering, science, technology and accountancy professions as careers of choice;
- expose learners to the business world in a fun and educational manner;
- introduce learners to simulated practices; and
- afford learners an opportunity to interact with their peers, as well as members of training organisations and universities.
Each camp consists of a five-day workshop. Facilitators are invited to help motivate the learners and develop key skills identified as underdeveloped in African learners; soft skills, numeracy, study skills and examination techniques.
All SAICA’s transformation project managers involved in the camps maintain a database of learners interested in the SET and accountancy professions. They track the learners and assist where possible to obtain bursaries for them.
Mosibudi Mangena, the Minister of Science and Technology, says the development camps project “gives concrete expression to the joint initiative between the DST and SAICA”.
The Minister is confident that the impressive pass rates being achieved by Thuthuka-supported students at secondary and tertiary level will result in a marked increase in the number of black chartered accountants, scientists and engineers entering the mainstream economy.
Mulder maintains that Thuthuka in general and the development camps in particular have played a dominant role in:
- growing the number of South Africa’s black African CAs(SA) from 403 in 2003 to the current 973; and
- boosting the number of female South African CAs(SA) from 4 135 in 2003 to the current 6 822.
“The percentage growth in these numbers far exceeds the percentage increase in the total number of CAs(SA) in South Africa – from 21 856 to 27 047 in the same period.”
She says that while the support and enthusiasm for the camps is highly gratifying, SAICA would welcome additional donations.
“Ideally, leading organisations might consider awarding a bursary to the top learner in each province. It is, after all, the business sector that will benefit most from an increased black CA(SA) population.” .
SPECIAL REPORT – THUTHUKA
STUDENT PROFILES
I am very thankful!
Name: Stephen Klein (21), UCT, 4th year (PGDA), from the Eastern Cape.
Thuthuka Project Manger: Thembelani Vanqa
Personal Profile
I am from Breidbach, a township in King Williams town – Eastern Cape. I am the only child in our family who had the opportunity to further my education and this was only made possible because of the Thuthuka Bursary Fund. I attended Breidbach primary and later Breidbach secondary school. In grade seven, I was chosen to represent the Eastern Cape in the maths Olympiad held in Cape Town, and acheived third place.
How did you find out about the Thuthuka Education Upliftment Project (TEUP)?
I was invited to the Thuthuka camps.
When did you join Thuthuka and why?
I joined in 2005 because they were offering me an opportunity to achieve my CA(SA) dream.
What are your views about the mentorship and training provided by Thuthuka?
At UCT, Thuthuka is part of the CADP and we have great mentors, extra workshops, and all resources to better our learning.
How has Thuthuka contributed to you attaining your BCom degree?
The fact that someone out there believes in me and has invested so much was more than enough encouragement these past three years. The meetings with Thembelani and other Thuthuka managers have always encouraged me. I have never had any issues regarding accommodation, fees, text-books etc. because the bursary covers it all.
What are the challenges you face and how does Thuthuka and the Project Managers support you?
Most of the challenges we face are quickly resolved by our project managers. We are not afraid to turn to them for support whenever we are in a sticky situation because we are friends with each other rather than just having a professional relationship.
What makes Thuthuka Bursary Fund (TBF) unique?
It is more of a support system, rather than just cash thrown at us.
Describe your relation with your University co-ordinator.
Dr June Pym is an amazing co-ordinator. She’s like a mother to all of us, and tries to help with whatever problems or challenges we face. She has an open-door policy and has really been a pillar to us all.
Thus far, what have been your highlights?
My graduation was a major highlight, as well as the fact that I was chosen to attend the Excellence Awards twice so far.
What does Thuthuka mean to you?
It is an honour to be part of the project. Thuthuka has made my dream a reality and for that, I am very thankful!
Thuthuka is uplifting and motivating.
Name: Kholofelo Sekoaila (21), UJ, Honours year, from the Limpopo Province.
Thuthuka Project Manager: Mr. Jelvin Griffioen
Personal Profile
I grew up in Moletjie Ceres Village in Polokwane. I attended S J van der Merwe in Lebowakgomo.
How did you find out about the TEUP?
I found out at the TEUP through its 3-week academic workshops held for grade 11 and 12 learners. I then applied for a TBF bursary afterward and was fortunate to be granted one.
What are your views about the mentorship and training programmes provided by Thuthuka?
These programmes are fantastic as the mentors help you settle in by explaining what we should expect from university life.
What other options were available to you before joining Thuthuka?
There were no other options available.
How has Thuthuka contributed to you attaining your BCom degree?
The Fundanathi classes for accounting and financial management really helped me attain my 1st degree.
What are the challenges you face and how does Thuthuka and the Project Managers support you?
My biggest challenge was in my 3rd year when I felt that my best wasn’t good enough and almost everything seemed to be going wrong. The equity clerks and the project co-ordinator helped me during our one-on-one meetings. The other advantage is the close relationships we have with our student mentors.
What makes TBF unique?
We have various sponsors, vacation work in different firms every year. When we finish our CTA, we have the opportunity to do our training at one of the top firms from the pool of firms that support Thuthuka.
Describe your relationship with your University Co-ordinator.
He is reliable, approachable and always willing to help.
Thus far, what have been some of your personal highlights?
- Being selected as one of the mentors for the 2006 group of 1st years.
- Going on a camp to Mpumalanga as part of the team building exercise for mentors and tutors in 2006.
- Being selected as one of the few top black students to attend the Business Orientation Programme at PWC in my 1st year.
- Attaining my degree.
- Qualifying to do Honours in BCom Accounting.
- Going to Durban as part of the 2nd year’s Social.
What does Thuthuka mean to you?
Thuthuka is a programme that uplifts and motivates students to reach their potential and realise their desire to become CAs(SA).
It’s changing people’s lives.
Name: Almon Dladla, UJ, Honours year, from KwaZulu Natal.
Thuthuka Project Manager: Mr. Jelvin Grevion
Personal Profile
I’m from Madlankala. I studied at Maqhama Primary and matriculated at Mcabango High. I am a hard worker who never gave-up. I love sport and music. I’m the President of Equity F.C, co-ordinator of a poetry group, member of a music group and member of the Ikhaya LeZion Youth Forum.
How did you find out about the TEUP?
I was part of 10 students from my school who were invited to attend a 3 week Thuthuka Camp where we did mathematics, accounting and english.
When did you join Thuthuka and why?
I joined Thuthuka in 2005 as they were offering bursaries that would mean I could attend any university of my choice.
What are your views about the mentorship and training provided?
Mentorship for 1st years assists new university arrivals with anything they need to know about their new lives on the campus. The tutors help students with different subjects and also professionals come to talk to students about life skills. Equity also provides students with extra classes where students are taught exams techniques.
How has Thuthuka contributed to your attaining your BCom degree?
By paying for my accommodation, study fees, text books and providing extra classes from 1st year to Honours year.
What are the challenges you face and how does Thuthuka and the Project Manager support you?
Adapting to a new place, new environment and the University workload were my greatest challenges. Thanks to mentors, extra classes and tutors who were always there to assist.
What makes TBF unique?
The fund is a contribution by different accounting firms and other institutions, to assist underprivileged students (mostly black and coloureds). After passing honours year, students get to choose amongst the firms that contributed to their studies for a training contract.
Thus far, what have been your highlights?
Being a member of Thuthuka family, obtaining a BCom Accounting Degree, winning the 2007 soccer tournament and being in the Accountancy SA magazine.
What does Thuthuka mean to you?
It is a good project and I hope it grows bigger in terms of numbers and contributions. Thuthuka means developing an individual and a country. It also means being excellent in everything I do and teamwork between all stakeholders. Most of all it means changing people’s lives for the better.
It’s an amazing opportunity!
Name: Christina Raphela (23), UNISA – 4th year (CTA) from the Limpopo Province.
Who is your Thuthuka Project Manager: Natalie Zimmelman.
Personal Profile
I’m from Limpopo and came to Gauteng to further my studies at Wits University. I was awarded the golden key membership as one of the top 15 in the faculty of commerce, law and management.
How did you find out about the TEUP?
Through the Umsobomvo Youth Fund programme.
When did you join Thuthuka and why?
I joined Thuthuka in 2006, because I desperately want to become a CA(SA).
What are your views about the mentorship and training programmes provided by Thuthuka?
The programme is great. We get taken to the WOW group for tutorials in accounting and auditing before we start our professional training. This is absolutely invaluable to ensure we’re completely ready for the working environment. We’re tutored by CAs(SA) who often become your mentors for years to follow.
What are the challenges you face and how does Thuthuka and the Project Managers support you?
Studying and working at the same time can be very difficult but with me being on the programme, I have an opportunity to go to WOW classes once a month to make sure that I am up to date with my studies.
What makes TBF unique?
The people in the project make it more fun and the understanding you receive from your fellow learners, WOW and SAICA is amazing.
Thus far, what have been some of your personal highlights?
Passing my post-graduate diploma in accounting science in 2007 was a great achievement for me, and also qualifying to study for a CTA this year. The milestone will be studying and doing my articles at the same time.
What does Thuthuka mean to you?
It’s an amazing opportunity to attain my dreams.
