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UP-TO-DATE: Keeping you informed of business today

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7 easy ways to conserve energy

Conserving energy helps the planet and saves money – so why don’t more people make the effort to do it? Simple conservation steps can have a great impact.

  • Set washing machines to either the warm or cold water setting, not hot.
  • Turn down the water heater thermostat.
  • Clean or replace air filters as recommended. Energy is lost when air conditioners and hot-air furnaces have to work harder to draw air through dirty filters.
  • Turn off lights, TVs and computers when not being used.
  • Insulate walls and ceilings. This can save 20% to 30% on home-heating bills and reduce carbon dioxide emissions.
  • Install programmable thermostats. This can reduce heating and cooling bills as much as 10%.
  • Turn down the refrigerator temperature. Refrigerators account for about 20% of household electricity use.

Source: The Star, 29 July 2015

Don’t lose your most valuable talent

Every time you lose a good employee, it costs you money because you’ll need to recruit and train someone to replace him or her. It disrupts continuity in your business, can hurt customer relationships, slows you down, and results in you losing a small piece of your corporate memory. Here are some common mistakes:

  • Not listening to employees: It’s important to gather employee feedback through formal and informal channels alike.
  • Not communicating with employees: Try to keep employees as well informed about activities within the business as you can.
  • Inflexible working practices: The world has changed thanks to technologies that allow people to be productive wherever they are. However, working practices at many organisations have yet to catch up.
  • Slashing training and development budgets to reduce costs: Most employees place a high value on opportunities to develop their skills and learn new things, and that’s doubly true of the most ambitious, high-performers that could become your business’s future leaders.
  • Making poor hiring choices: One of the biggest reasons people don’t last in a job is that they weren’t a right fit for the role or the company in the first place.
  • Not having transparent performance management: A formal performance management process brings fairness and transparency into your relationship with employees.
  • Failing to invest in employee engagement: This can be defined as techniques, tools and strategies used to get employees motivated about their work and engaged in the business’s strategy, values and culture.

Source: Anton van Heerden, MD, Sage HR & Payroll

Gautrain in numbers

  • R20 billion – the contribution the Gautrain made to the GDP of Gauteng over six years, according to a KPMG report on its impact.
  • R27 billion – the total cost of the train. The Gautrain Management Agency receives on average R900 million per year in subsidies from government.
  • 63 000 – the number of commuters using the train on weekdays.
  • 21 300 – fewer car trips taking place each day.
  • R12,9 billion – increase in residential property values.

Source: Financial Mail, 23–29  July 2015

Book review
Financial reporting for directors in South Africa
In terms of South African legislation, company directors are responsible for ensuring that financial statements comply with the relevant legal requirements. Financial Reporting for Directors in South Africa by Garth Coppin covers the most important areas that busy directors should consider when approving financial reports. It gives a comprehensive understanding of the drive for financial reporting requirements in South Africa, and the legal and Stock Exchange requirements for financial reporting.
This book is destined to become an indispensable guide to the major issues and debates around financial reporting in South Africa. It provides clear and lucid explanations of directors’ legal responsibilities in terms of financial reporting, as well as those areas on which they should focus in respect of accounting standards. It also discusses the various types of financial reports companies may be required to produce, and since financial statements are often required to be audited, it looks at what an audit is, when an audit is necessary, how to prepare for an audit, and what to expect of auditors.

EY’S MANDELA DAY INITIATIVE
In the spirit of Mandela Day, EY organised a lunch for EY staff on 17 July to generate funds to be donated to the Thuthuka Bursary Fund. An EY staff member would buy a ticket for R67 and would receive lunch, a beverage and a free yellow EY cap in turn.
To ensure that as many tickets as possible were sold, an internal communication drive took place to create awareness for the initiative.
On the day of the lunch, Next Gen girls walked  around the office to sell tickets to EY staff and drum up support through war cries and songs. Latoya Thapedi and Henry Magosha took photos of EY staff holding a banner stating: 25 Bursaries for Mandela Day #IAMTHUTUKA. Each participant was also asked to comment on why they were supporting the Thuthuka initiative. These comments along with the photos were posted on social media (see the SAICA page on Facebook).
EY raised R52 254 on the day.

ASSURANCE
Subject: Auditor reporting resources available via the SAICA website
The new and revised auditor reporting standards, effective for audits of financial statements for periods ending on or after 15 December 2016, have been recognised as the most significant development in auditing in recent history. Various resources are accessible via the auditor reporting section on the SAICA Assurance webpage (at www.saica.co.za – Technical – Assurance). These include:
•  The suite of new and revised auditor reporting standards
•  The IAASB Auditor Reporting Toolkit
•  Nine articles on auditor reporting that have appeared in Accountancy SA
•  Recordings of:

  • Joint SAICA/JSE panel discussion: New Auditor’s Report – It is not just going to affect auditors!
  • Joint SAICA/IRBA event:  New Auditor’s Report – Straight from the horse’s mouth.

Subject: IAASB released revised ISAs, Addressing Disclosures in the Audit of Financial Statements
The revisions, which affect ten International Standards on Auditing (ISAs), will be effective for audits of financial statements for periods ending on or after 15 December 2016. The aim is to enhance the requirements of the ISAs and the auditor’s work effort in relation to disclosures (in particular qualitative disclosures).

Subject: IAASB <IR> working group publishes update on Exploring Assurance on Integrated Reporting and Other Emerging Developments in External Reporting
The publication’s release coincides with the issuance of the International Integrated Reporting Council (IIRC)’s Overview of Feedback and Call for Action. This paper informs stakeholders about the IAASB’s ongoing work to explore assurance on integrated reporting and other emerging developments in external reporting.

Subject: IRBA issued the Revised Guide for RAs: Reportable Irregularities
This guide is effective from 1 July 2015 and can be downloaded from the IRBA website. Among others, enhanced guidance is provided around the interpretation and application of the criteria for a reportable irregularity (RI), as well as 23 new and reworked illustrative examples on determining the existence of an RI.

ACCOUNTING
Effective date of the new revenue standard revised
The International Accounting Standards Board (IASB) has deferred the effective date of IFRS 15, Revenue from Contracts with Customers, to 1 January 2018. Download IFRS 15 from eIFRS.

Financial Reporting Standards Council (FRSC) reappointed as a member of the Accounting Standards Advisory Forum (ASAF)
The ASAF comprises 12 non-voting members represented by individuals, and the FRSC currently occupies the Africa seat. Kim Bromfield currently represents the FRSC at the ASAF. More information about the ASAF can be downloaded from the IASB website.

2015 edition of the IFRS for SMEs
This edition will be published during the third quarter of 2015. This follows the publication of the amendments to the IFRS for SMEs in May 2015. SAICA will be hosting seminars on these amendments during September and October 2015.
Trustees to review the structure and effectiveness of the IFRS Foundation
This review will focus on ensuring that the relevance of IFRS is maintained and exploring approaches to promote consistent application of IFRS. ED 358 – Request for Views – Trustees’ Review of Structure and Effectiveness: Issues for the Review and the IFRS Foundation press release can be downloaded from the SAICA website. Comments on ED 358 can be submitted to SAICA by 30 October 2015.

PUBLIC SECTOR
ASB issued amendments to GRAP 16 and 17
These amendments are effective for the financial statements period beginning on or after 1 April 2016. Early application is encouraged. Some of the key amendments include an additional requirement included to GRAP 17 and GRAP 103 for entities to disclose repairs and maintenance for PPE and heritage assets and the modification of GRAP 16 to require the separate disclosure of repairs and maintenance from operating expenses on investment properties that did or did not generate rental revenue during the period.

TAX
When is a statutory charge a tax for the purposes of a money bill?
Deciding whether an exit charge was a tax for the purposes of section 77 of the Constitution and thus subject to its prescriptions was a central question in the recent case: South African Reserve Bank & Another v Mark Shuttleworth & Another [2015] ZACC 17 18 June 2015. The starting principle as stated at paragraph [42] of the judgment is that the executive may not impose a tax burden or appropriate money without the consent of the elected representatives and thus it solely falls within the function of the Legislature. Following this is the principle at paragraph [44] that everything that is called a tax by statute or otherwise is not necessarily so, which begins the journey into muddy waters with the introduction of a dominant purpose test at paragraphs [48] & [52].

The focus of the dominant purpose test, namely whether to raise revenue or for some other purpose, raises more questions than it answers within the current legislative environment. For example, the carbon tax, plastic bag levy and ‘sin taxes’ are all documented to be primarily intended to change behaviour and not to raise revenue, not to even mention the withholding tax on services inserted with the sole purpose of identifying permanent establishments. In light of this recent decision, it is questionable whether the correct legislative process has been followed in implementing these other taxes.