It is indeed true that with time comes maturity. For instance, take a look at financial reporting by companies. It started out as simple book-keeping and has progressed to financial accounting using globally accepted standards that enable users to comfortably compare one company to another. Sustainability reporting was the next big move, with companies showing their economic, environmental and social performance. It’s time now for another quantum leap by companies to reflect a wider view of their performances in integrated reports that show the links between a company’s financial performance and its material economic, environmental and social performance.
The SAICA website, www.sustainabilitysa.org aims to offer an information hub on integrated reporting and sustainability reporting for CAs (SA), corporate sustainability managers and the general business community. It highlights the current major sustainability issues, outlines the available standards and guidelines, and gives access to research reports and surveys on sustainability reporting. The integrated reporting section aims to offer an information resource with access to the latest research reports and surveys on this important area of corporate reporting.
The site is updated and maintained by SAICA as part of its sustainability and integrated reporting focus area. SAICA also acts as secretariat to both the Integrated Reporting Committee (IRC) and its working group. We hope you find the site useful and we welcome your comments.
Auditors continue to verify and issue B-BBEE certificates
The Independent Regulatory Board for Auditors (IRBA) confirmed that registered auditors may conduct Broad-Based Black Economic Empowerment (B-BBEE) verification and issue certificates.
This follows confusion around the recent release of reports to the portfolio committee on trade and industry which implied that registered auditors are not yet approved to conduct B-BBEE verification.
IRBA confirmed that, according to the Department of Trade and Industry (the dti) Statement 005, the IRBA is empowered to approve registered auditors who meet certain requirements, to provide B-BBEE assurance services and to issue valid B-BBEE certificates with effect from 1 October 2011.
Registered auditors have to comply with the IRBA code of professional conduct, the B-BBEE Continuing Professional Development (CPD) requirements established by the IRBA, auditing pronouncements prescribed by the IRBA, evidence of superior contributor status and confirmation that the registered auditor has completed the post graduate B-BBEE Management Development Programme satisfactorily.
Processes to give the IRBA the mandate to regulate all B-BBEE verification agencies, in addition to auditors who are already registered with the IRBA, is under discussion. In the meantime, all approved registered auditors can continue to offer verification services.
Regulation of Tax Practitioners
In terms of the legislation, a person who provides advice to another person with respect to the application of a Tax Act, or completes or assists in completing a return by another person, must be registered with SARS as a tax practitioner and also be registered with (or fall under the jurisdiction of) a ‘recognised controlling body’.
In terms of the legislation (section 240A of the Tax Administration Act), SARS must recognise controlling bodies for natural persons that provide advice with respect to the application of a Tax Act, or for completing returns.
SAICA meets the requirements of the Act in this regard and has already approached SARS with the intention of being accredited as a ‘recognised controlling body’. Once the confirmation is received from SARS that SAICA is recognised, all SAICA members in good standing will then meet the requirements of the Act, if they are registered as tax practitioners. As such, there will be no need to register with another professional body in order to practise as a tax practitioner.
SAICA will inform you of the outcome of the request and what will be required to register as tax practitioners with SARS.
The Future Role of Civil Society
Civil society actors – including NGOs, labour organisations, faith groups and a range of other emerging actors – are more important than ever. The past decade has seen the rise of the increasingly aware, connected and educated global citizen demanding new ways of engaging with business and governments in a time of economic and political turbulence.
The Future Role of Civil Society report is the outcome of an eight-month project, in collaboration with KPMG International and involving over 200 leaders and experts, looking at how trends in technology, politics, society, economics and the environment are affecting the evolution of civil society and its implications for stakeholders. The report – as released at the recent World Economic Forum (WEF) 2013 gathering at Davos – presents the main global trends impacting the relationships between sectors, highlights the value that civil society provides and explores how the role of civil society might change over the coming two decades as a result.
A particular challenge highlighted for civil society leaders is to balance the emerging roles of facilitator, enabler and constructive challenger towards other sectors, while adapting to the rapidly shifting context of a technology-driven and uncertain world.
The report will provide leaders from business, government and international organisations with insight into new models of approaching societal challenges that draw on the unique resources and perspectives of civil society actors.
Gadget of the month – BlackBerry® 10
The re-designed, re-engineered, and re-invented BlackBerry®10 was launched. The platform creates a new and unique mobile computing experience. Available on two new LTE-enabled smartphones, the BlackBerry® Z10 (all-touch) and BlackBerry® Q10 (touch with physical keyboard) smartphones powered by BlackBerry 10 offer you a faster, smarter and smoother experience than any other BlackBerry you have used before.
BlackBerry unveiled the new BlackBerry Z10 and BlackBerry Q10 smartphones at events held simultaneously in New York, Toronto, London, Paris, Dubai, and Johannesburg.
“Today sees a re-invented BlackBerry launching an entirely new mobile experience,” said Thorsten Heins, President and CEO of BlackBerry. “We are thrilled to be introducing BlackBerry 10 on the new BlackBerry Z10 and BlackBerry Q10 smartphones, to deliver a faster, smarter experience that continuously adapts to your needs. Every feature, every gesture, and every detail in BlackBerry 10 is designed to keep you moving.”
Mining Resources Minister, Susan Shabangu, spoke at the Mining Indaba in February 2013. She said that South Africa’s mining industry was in reasonably good shape, but beneath the surface, the tensions remained. She said that regulatory reform had unlocked the industry’s development potential.
• The number of mines has increased to about 1 600 from 933 in 2004.
• Revenue generated grew to R370 billion by the end of 2011 from R98bn in 2004.
• Employment in the mining industry grew from just under 449 000 in 2004 to marginally above 530 000 last June before it started to regress slightly in the third quarter last year.
• In 2011, mining contributed 9.2% of South Africa’s GDP and helped to generate 18.7% of GDP.
• About 13.5% million people depend on mining-generated jobs.
• In 2011, out of a total local mining industry expenditure of R437bn, about 80% was spent in South Africa.
• In 1999 Anglo American invested over R188bn in South Africa.
• Citigroup calculated South Africa’s mineral endowment at an estimated $2.5 trillion.
SA GAAP AC 500-series issued as SAICA Guides
In March 2012 a joint announcement was communicated to the market by the Accounting Practices Board (APB) and the Financial Reporting Standards Council (FRSC) regarding the future of Statements of Generally Accepted Accounting Practice (SA GAAP).
The announcement indicated that SA GAAP will be withdrawn and will cease to apply in respect of financial years commencing on or after 1 December 2012.
SA GAAP includes an AC 500- series, which are interpretations of the AC 100-series (equivalent to IFRS). These AC 500-series of SA GAAP are interpretations of IFRS to address specific aspects, transactions or other issues that only occur in the South African context.
The FRSC has proposed changes to the Companies Act Regulations (Regulations) to make provision for the withdrawal date of SA GAAP and to create Financial Reporting Pronouncements (FRPs) that can be issued by the FRSC. It was envisaged that the AC 500- series of SA GAAP would be issued as FRPs by the FRSC to ensure consistency and continuity of financial reporting, especially, but not limited to, listed companies. As the Regulations have not been amended, SAICA’s Accounting Practices Committee (APC) has reissued those AC 500 series that remain relevant as SAICA Financial Reporting Guides, the only amendments being to delete references to SA GAAP and deleting the effective date and transition sections. In the interim, the JSE is expected to amend the Listings Requirements to make reference to the SAICA Financial Reporting Guides.
Educational material issued on measuring fair value of unquoted equity instruments
The IFRS Foundation has issued educational material to provide guidance on the application of principles in IFRS 13 – Fair Value Measurement, when measuring the fair value of unquoted equity instruments within the scope of IFRS 9 – Financial Instruments. Download the education material from the IASB website.
Depreciation and amortisation
The International Accounting Standards Board (IASB) proposes to amend IAS 16 – Property, Plant and Equipment and IAS 38 – Intangible Assets, to clarify that when applying the guidance in paragraph 62 of IAS 16 and paragraph 98 of IAS 38, a revenue-based method should not be used to calculate the charge for depreciation and/or amortisation, because that method reflects a pattern of economic benefits being generated from the asset, rather than the expected pattern of consumption of the future economic benefits embodied in the asset. The proposed amendment also provides further guidance in the application of the diminishing balance method. The deadline for comment to the IASB on ED 323 – Clarification of Acceptable Methods of Depreciation and Amortisation: Proposed Amendments to IAS 16 – Property, Plant and Equipment and IAS 38 – Intangible Asset is 2 April 2013.
Guidance on accounting for the acquisition of an interest in a joint operation
IFRS 11 – Joint Arrangements, does not give explicit guidance on the accounting for acquisitions of interests in joint operations. As a result, the IASB proposes to add new guidance to IFRS 11 on accounting for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a business, (as defined in IFRS 3 – Business Combinations). The proposals state that the acquirers of such interests must apply the relevant principles on business combination accounting in IFRS 3 and other Standards, and disclose the relevant information specified in these Standards for business combinations. The deadline for comment to the IASB on ED 325 – Acquisition of an Interest in a Joint Operation – Proposed amendments to IFRS 11 – Joint Arrangements is 23 April 2013.
IASB to amend consolidations standards
The IASB proposes to amend IFRS 10 – Consolidated Financial Statements and IAS 28 – Investments in Associates and Joint Ventures, to address an inconsistency between the requirements in the two standards in dealing with the sale or contribution of a subsidiary.
The deadline for comment to the IASB on ED 324 – Sale or Contribution of Assets between an Investor and its Associates or Joint Venture – Proposed Amendments to IFRS 10 – Consolidated Financial Statements, is 25 April 2013. The exposure draft and the IASB press release can be downloaded from the SAICA website.
POLL OF THE MONTH
We asked …
President Jacob Zuma’s state of the Nation Address: Do you think he touched on relevant issues?
No, he is just an individual – 28%
He will appeal to the business community – 61%
Many business leaders and economists are happy he is back – 11%
Maybe in SA but globally it won’t – 0%
FINANCIAL SERVICES SECTOR A KEY ENABLER IN AFRICAN INVESTMENT
We asked …
Business, politicians and economists support the medium-term budget, what did you think?
He outlined a clear vision of the country – 10%
The country needs a new direction and firm leadership – 50%
He touched on a series of already discussed ideas – 30%
He announced new and creative ways to release economic strains. – 10%
The budget is good, but our government not 24%
THIS MONTH’S MUST READS …
Killing for profit
by Julian Rademeyer
On the black markets of Southeast Asia, rhino horn is worth more than gold, cocaine and heroin. This is the chilling story of a two-year-long investigation into a dangerous criminal underworld and the merciless syndicates that will stop at nothing to obtain their
This book is a compelling, meticulous and revelatory account of one of the world’s most secretive trades. It exposes the poachers, gangsters, con men, mercenaries, killers, gunrunners, diplomats, government officials and crime bosses behind the slaughter. And it follows the bloody train from the front lines of the rhino wars in South Africa, Zimbabwe and Mozambique to the medicine markets of Vietnam and the lair of a wildlife-trafficking kingpin on the banks of the Mekong River in Laos …
Everyone’s Guide to the Consumer Protection Act
by Clive Gibson & Geoff Hull
The CP Act has given every South African rights and obligations that up until now have not been an issue, and ignorance of the law is not a defence. This easily accessible guide explains how, among other things the CP Act aims to:
• Promote and protect the economic interests of consumers;
• Improve access to, and the quality of, information that is necessary so that consumers are able to make informed choices;
• Protect consumers from hazards to their wellbeing and safety;
• Develop effective means of redress for consumers; and
• Promote and provide for consumer education.
SAICA welcomes the report of the Auditor General of South Africa (AGSA) on their performance audit on the use of consultants at selected National Government Departments.
Government entities use consultants in various disciplines, which include financial management, IT and engineering, amongst others. According to Mohammed Lorgat, SAICA’s Project Director: Public Sector, there have been numerous comments in the media following the AGSA report. These comments focussed on the amount of money spent on consultants but not really on the AGSA report in totality.
“SAICA strongly believes that the correct use of consultants can assist the public sector to add value and to provide better service delivery. These consultants can provide specialist or technical skills necessary for the public sector to tap into, in order to fix, maintain or enhance current processes or methods of operation”, says Lorgat.
The AGSA report reflects an amount spent on consultants by National and Provincial Government departments between the 2008/09 to the 2010/11 financial year to the tune of R102 billion. “This amount is indeed exorbitant. Coupled with the findings of the AGSA, such as deficiencies in the appointment process of consultants, poor performance management of consultants and extension of contracts, it is fair to say this was fertile ground for the incorrect spending of Government funds,” says Lorgat.
Lorgat states that it is however important to put the AGSA report into perspective, noting that the AGSA do not suggest that the use of consultants within the public sector should be completely stopped.
Imran Vanker, the Auditor General’s representative on the SAICA Public Sector Committee comments: “Among other things, what we do recommend in the report is that the use of consultants should be properly planned, properly managed and rigorously monitored on an ongoing basis for the duration of the contract, in order to derive value for money from them.”
The root causes for the findings in the AGSA report are the following:
• Lack of leadership by Government departments;
• Non-compliance or a poor effort at compliance with supply chain management regulations;
• Poor or ineffective contract management.