The SAICA Member Values are: Integrity, Professionalism, Diligence, Accountability and Dedication.
Your CA(SA) designation represents the essence of what you stand for as a true business leader. It tells the world that everything you do is filtered through SAICA’s stringent Ethics and Values Code … a part of the formula that sets you apart as a true South African business leader.
The SAICA Ethics and Values Code is the cornerstone of our brand and your commitment is pivotal.
Visit www.saica.co.za/ethics to view the full Code.
Help for small businesses
Payroll subscription software is making it affordable for start-up and SME businesses to automate their payroll. With payroll subscription users pay a low monthly fee and don’t incur the usual initial investment costs they would when normally purchasing an automated desktop payroll solution.
Sage Pastel Payroll & HR general manager, Laurica Kok, says that in a difficult economy this is a lucrative option in the form of a low monthly payment plan.
Regular statutory and legislative changes in the payroll and HR industry make it challenging for businesses to comply with the six major Payroll Acts. Companies can simply not afford to process their payroll by making use of a manual system or formulae driven worksheets.
Manual and worksheet payroll processing can result in incorrect calculations and deductions, meaning companies can potentially face SARS penalties. Staying abreast of regular legislative updates can be a daunting task for any business.
Subscription payroll enables companies to make use of automated payroll software to confirm that payslip calculations are accurate first time round, every time.
For more information visit www.pastelpayroll.co.za.
The IASB is conducting a full review of the Conceptual Framework for Financial Reporting. In this review the IASB is expected to:
• Relook at the definitions of an asset and a liability and provide additional guidance to support those definitions. The revised definitions would focus more clearly on the fact that an asset is a resource, and a liability is an obligation and clarify the status of those resources and obligations that are not certain to result in inflows and outflows of economic benefits.
• Improve on the current guidance on when assets and liabilities should be recognised and suggests new guidance on when assets and liabilities should be derecognised.
• Develop guidance that could assist the IASB in selecting the most appropriate measurement basis for an asset or a liability.
• Introduce principles to assist the IASB when it decides which items of income and expense should be recognised in profit or loss, and which should be recognised in Other Comprehensive Income (OCI).
The deadline for comments to SAICA on this discussion paper is 15 November 2013.
The ED 336 – Discussion paper on A Review of the Conceptual Framework for Financial Reporting, the IASB press release and screenshot can be downloaded from the SAICA website.
Numbers to remember
The percentage of Web users who share their password with others, according to a recent survey by Google.
The value of diamonds stolen from a hotel exhibit in Cannes (France), one of the largest jewellery heists in history.
The percentage of babies in a Canadian study who had a deformation on the back of their heads because of clumsy parenting.
How Africa developed a drinking problem?
According to the World Health Organisation, Africa has the world’s highest proportion of binge drinkers. Here are some reasons why:
A significant share of Africa’s teenagers and young adults don’t have jobs – about 65% in Kenya, for example – and are not educated about the dangers of alcohol abuse.
LAX LAW ENFORCEMENT
Many countries have laws restricting the sale of alcohol to minors, but critics say stronger policing is needed to ensure that vendors obey them.
Poor Africans have historically made their own booze, using dangerous ingredients like battery acid and methanol to increase its potency.
Major brewers like Diageo and SABMiller are starting to target Africa’s rising middle class, spending billions on advertising and manufacturing.
Source: Time Magazine (August 2013)
Did you know?
A progress report on the demand of EU membership
Access to the EU used to mark a European nation’s economic coming-of-age. Though deepening financial troubles have tarnished membership status, some countries still want in.
Croatia joined in July this year and these four may not be far behind:
In April, after Serbia formally agreed to cede its last foothold in Kosovo, the European Commission recommended that accession talks be opened.
The Balkan nation’s admission is largely dependent on whether it adopts a constitutional amendment to strengthen its judiciary and rule of law.
Despite praise for its economic development, its bitter dispute with Greece over the name Macedonia (also a region in Greece) could be a roadblock.
Its banks helped trash the euro-zone economy, and its new centre right government halted membership talks to shield Iceland’s recovery from the EU debt crisis.
Source: Time Magazine (July 2013)
IFRS Foundation issues Application Guidance on IFRS for SMEs for micro-sized Entities
The IFRS Foundation has issued a Guide on Applying IFRS for SMEs for micro-sized entities, designed to assist micro entities in applying the IFRS for SMEs. This Guide contains extracts of only those IFRS for SMEs requirements that will apply to a typical micro entity, without modifying any of the principles for recognising and measuring assets, liabilities, income and expenses. This guide can be downloaded from the IASB website.
The publication of the IFRS Foundation’s guide follows the publication of SAICA’s Electronic guide on Applying IFRS for SMEs for Micro Entities (SAICA Electronic Guide) in 2012.
The SAICA Electronic guide comprises a user checklist, a summary of the requirements of the IFRS for SMEs standard, an application guide with practical examples for each section covered by the guide, illustrative financial statements, and a disclosure checklist for micro entities. It also covers the sections of the IFRS for SMEs that are common to a micro entity. Entities that apply the SAICA electronic guide can also claim compliance with the IFRS for SMEs. The SAICA Electronic guide can be purchased from SAICA at R499.
Burning issues in financial reporting with the Chairmen of the IASB and the IFRS Foundation Trustees
The Chairmen of the IASB and the Trustees of the IFRS Foundation, Hans Hoogervorst and Michel Prada, discuss the future of financial reporting, IFRS adoption and challenges around the world.
The Click2Start interview on the future of financial reporting can be accessed from the SAICA website.
Call for behavioural change in financial statement disclosures
In his speech, at a conference in Amsterdam, the IASB Chairman, Hans Hoogervorst, sets out the ten-point plan to improving financial statement disclosures. Hans Hoogervorst’s speech entitled ‘Breaking the boilerplate’ can be found on the IASB website.
Novation of Derivatives and Continuation of Hedge Accounting
New amendments to IAS 39 – Financial Instruments: Recognition and Measurement, will provide entities with a relief from discontinuing hedge accounting when novation of a derivative meets certain criteria.
Similar relief will also be included in IFRS 9 – Financial Instruments. This relief has been introduced in response to legislative changes across many jurisdictions that would lead to the widespread novation of over-the-counter derivatives.
Novation of Derivatives and Continuation of Hedge Accounting – Amendments to IAS 39 –Financial Instruments: Recognition and Measurement, are effective for annual periods beginning on or after 1 January 2014 and early application is permitted. The amendments can be downloaded from eIFRS and the IASB press release can be found on the IASB website.
Changes to accounting for bearer biological plants
The IASB proposes to change the accounting for bearer plants. In terms of these proposed changes, bearer plants would be accounted like property, plant and equipment in accordance with the requirements in IAS 16 – Property, Plant and Equipment, rather than in accordance with IAS 41 – Agriculture, thus permitting the use of either a cost model or a revaluation model.
Comments on ED 335 – Agriculture: Bearer Plants – Proposed Amendments to IAS 16 – Property, Plant and Equipment and IAS 41 – Agriculture, are due to the IASB by 28 October 2013.
Post-implementation review on the Business Combinations standard begins
The post-implementation review on IFRS 3 – Business Combinations, has commenced. Targeted outreach will be undertaken during Phase I to identify practical implementation problems. Phase II will encompass an extensive outreach and analysis of comments received on the Request for Information.
More information on the post-implementation review on IFRS 3 – Business Combinations can be obtained from the IASB website.
Mark Otty CA(SA) is Area Managing Partner for Europe, Middle East, India and Africa at EY.
What are the key lessons you have learnt that make you a good leader?
I would not claim to be a good leader but I have learnt a lot over the
years. Some of the most important lessons would be: assemble a great
team around you – (I am privileged to have an exceptionally talented
executive team); treat everybody you interact with respect; and look for
opportunities not problems (the problems will find you) finally, courage
and humility are very powerful attributes.
What role does a great company culture play in retaining talent?
I believe culture is increasingly important. Young people today are much more demanding of their employers and have great opportunities. I believe many evaluate culture very carefully in making decisions about joining or staying. I also believe that culture has a big impact on the motivation of our people, so this in turn impacts performance.
What are the key success factors for one of the leaders of a global institution like EY?
I am still working on the attributes but in my mind they would include, an ability to inspire people, a strategic mindset, the flexibility to adapt to different cultures and stamina to cope with the travel.
What advice would you give to trainees who aspire to be business leaders in future?
You have arguably the best educational foundation: be bold and grab every opportunity that is handed to you.
Innovation: A top priority for business: A PwC Pulse Survey
CEOs globally are ramping up their efforts to innovate and find new ways to do business in a move to stimulate growth in a challenging global business environment. A PwC Pulse Survey of 246 CEOs shows that 97% of business leaders see innovation as a top priority for their business.
However, not every region sees the need for innovation in the same light. The appetite for innovation was strongest in Asia Pacific and North America, where CEOs unanimously agreed that innovation is a key focus area within their organisations.
Rather than embarking on ambitious expansion projects, South African CEOs are hesitant about investing in innovation or introducing new technology. Strategies for managing talent (89%) and increases in technology investment (88%) are the areas in which South Africa’s CEOs expect to see the most internal change.
Stanley Subramoney, Strategy Leader of PwC South Africa, says: “Innovation is moving up the boardroom agenda as companies recognise its vital importance in sustaining growth.
Almost all CEOs taking part in our survey recognise the value of innovation for their companies, with most seeing it as either a priority or a primary focus.”
“The fact that top notch innovation has now become as important as operational excellence represents a step change from our survey in 2009. Back then sharpening operational effectiveness was the overriding objective as companies sought to survive the sudden loss of revenue caused by the financial crisis. Now, three-quarters of CEOs regard innovation as at least equally important as operational effectiveness.”
The study shows that there are also a number of barriers to innovation. The strain on limited financial resources tops the list of constraints, though interestingly funding wasn’t in itself seen as a key ingredient for innovation. “This could suggest that money can’t buy you success on its own, but it does still need to be managed in a smart way. This is especially so at a time when the focus is shifting from gradual to more radical innovation.”
CEOs also see culture as one of the biggest constraints. This suggests that encouraging people within the organisation to embrace innovation is still proving to be a challenge, according to the survey.
Tips for the small business owner
Save money by marketing rather than advertising
The head of Start-up Business at Standard Bank, Leigh Livanos, recommends marketing as a cost-effective way of attracting and retaining customers. To get the best results, do a little upfront work:
• Identify your target markets.
• Identify what they need – can you save them time or money?
• Define what sets you apart from your competitors (your unique selling point). It can be as simple as providing a guarantee or a flat rate for after-hours call-out.
• Use this information to come up with marketing ideas such as distributing leaflets at appropriate events, sending promotional SMSes to customers, or putting posters in shop windows.
• Prioritise your ideas based on their ability to impact the customer.
This process gives you a marketing strategy. You can supplement it with low-cost advertising in community newspapers, school newsletter, and classified ads as well as posting material on free social media platforms. Use the AIDA formula:
• Grab attention
• Be interesting
• Create a desire
• Get the customer to take action
Finally, always measure the results of your marketing so that you find out what works and can repeat it.
South Africa Joins Efforts to Prevent Multi –National Cross Border Profit Shifting
South Africa has formally joined the Organisation for Economic Cooperation and Development (OECD) in their efforts to prevent multi-national companies shifting profits between tax jurisdictions in an attempt to evade paying taxes in the primary countries in which they operate.
South Africa will therefore become a partner in the OECD’s international action plan that sets out 15 actions designed to address the concerns surrounding ‘base erosion and profit shifting’ and related issues that are troubling tax authorities across the globe.
The OECD action plan identifies the actions, implementation deadlines as well as resources and methodologies required to execute the plan.
The plan follows an original OECD report that concluded that international tax principles are dated and cannot keep pace with the modern day, constantly changing business environment that has arisen with the rapid growth of digital economies and ecommerce.
Samsung Ativ BOOK 9 Plus
The ATIV Book 9 Plus from Samsung offers exceptional performance and a premium style chassis. At only 13.6mm thick, this Windows 8 notebook features a full QHD+ LED touch display (that has an amazing 3200×1800 resolution), an Intel Core i5 4th Generation processor, 4 GB memory, a fast 128 GB solid state hard drive, and an aluminium shell with an attractive mineral ash black matte finish.
The 13.3” SuperBright screen is anti-reflective, allowing you to work in the brightest of conditions. Samsung’s SideSync technology, available on all ATIV devices, helps you to share files, utilise keyboard and mouse sharing as well as screen mirroring with your Samsung Android smartphone.
Samsung South Africa includes a one year free training subscription with the Samsung’s Virtual Training Academy along with 1 GB free Wi-Fi internet per month for a period of one year with AlwaysOn.
AlwaysOn has over 1 000 hotspots across South Africa. The new Samsung ATIV Book 9 Plus is available from selected Samsung retailers from R19 999 including vat.
For more information and retailers go to www.samsung.com/za
LG Optimus G Pro
LG’s latest and greatest mobile phone is big, fast, and very smooth. This LG mobile phone has a massive 5.5″ IPS LCD screen which in real use is captivating, has bight accurate colours and excellent sensitivity. In terms of specifications, the LG Optimus Pro is king of the large smartphones with a 1.7 GHz quad core processor and 2Gig of main memory.
A cutting edge 13 MP camera with a 3140mAh battery to give all day stamina. The LG Optimus Pro is extremely well built, if a little shiny and prone to fingerprints. If a fast, cutting edge, large screen Android based smartphone is what you are looking for, then the LG Opimus G Pro is the one to look out for. It is available in black or white. Available from all mobile operators and outlets for a recommended retail price of R7 995.
For more details and local suppliers go to http://www.lg.com/za/ cell-phones/lg-E988
In the Office
Small and large businesses rely on the internet, and for most of us in business it is ADSL that supplies the need. All offices need stable, efficient and fast access to the internet. A new German made ADSL router called the Fritz!Box has just hit South Africa.
The Fritz!Box 7360 is a full function home and office networking solution. The latest high speed ADSL system called VDSL is standard, along with Wi-Fi N for up to 300 Mbps wireless. A full function telephone system (PBX) for both analogue and internet lines is included with an answering machine.
You can connect up to six DECT cordless phones as well. Two USB ports allow hard drives for backup or sharing. You can plug in 3G or LTE dongles for times when ADSL may be down.
An Android and iPhone app allows you to control your Fritz!Boz from anywhere, as well as get your voicemail or make calls via your office line. The Fritz!Box 7360 is available now for R2 795.