Meditari Accountancy Research

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Print ISSN: 1022-2529
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Section 80A(c)(ii) of the Income Tax Act 58 of 1962, as amended (the Act), introduced a new concept to the South African income tax environment: misuse or abuse of the provisions of the Act, including Part IIA thereof. According to the Revised Proposals on Tax Avoidance and section 103 of the Income Tax Act 58 of 1962 (Revised Proposals) the rationale behind the insertion of section 80A(c)(ii) was to reinforce the modern approach to the interpretation of tax statutes “in order to find the meaning that harmonizes the wording, object, spirit and purpose of the provisions of the Income Tax Act”. The objective of this article is to examine the rationale behind section 80A(c)(ii) of the Act.
 
The deductibility of an expense-the Moldowan approach
A section 80M(1)(d) reportable arrangement is defined in the Income Tax Act 58 of 1962, as amended, and contains the reasonable expectation of a pre-tax profit requirement. Such an arrangement must be reported to the Commissioner of the South African Revenue Service within 60 days. Failure to do so can result in a R1 million penalty. It is submitted that this requirement is subjective because of a lack of indigenous litigation and implementation guidelines. The Canadian reasonable expectation of profit (REOP) test may be of value to formulate objective standards against which to apply the section 80M(1)(d) reportable arrangement.
 
Black and Coloured chartered accountants (CAs) are under-represented in Accounting departments at academic institutions in South Africa. It is generally accepted that this is because of the poor remuneration offered in academia and a general shortage of Black and Coloured CAs. This study, which is based on a questionnaire to CAs, assesses their perceptions of a career in academia. It contrasts these perceptions of and requirements for a career in academia with current employment conditions and makes recommendations about increasing the number of Black and Coloured CAs in academia. These recommendations include increased remuneration and better promotion of the benefits of an academic career.
 
This paper presents the results of a survey designed to determine what tax topics are important in the educational background of a trainee accountant entering the training environment in South Africa. These topics were then compared to the 2008 tax syllabus prescribed by SAICA and taught at accredited universities in respect of the 2009 Qualifying Examination. The results indicated that the 2008 syllabus is largely meeting the expectations of respondents both in and outside public practice, although there are a number of topics that the syllabus setters and educators should reconsider when next reviewing and updating the 2008 syllabus and as part of the considerations for the new competency framework.
 
Prior accounting education literature documents that stereotypical images abound of the accountant as introverted, systematic, antisocial and boring. Although these stereotypes clash with the skills required of modern professional accountants to be problem solvers who regularly interact with people, the question is whether students wishing to become accountants still have these stereotyped perceptions. The purpose of this article is to investigate the preconceived notions of students in South Africa about accountants and whether these perceptions differ because of gender, home language or ethnical differences. A comparison is also made of the perceptions of school-leavers and final-year students to determine whether these perceptions change during students’ formal period of study at universities. This research, which is currently highly relevant, given the shortage of students pursuing careers as accountants, could contribute to the debate surrounding the concerns of the future of the accounting profession and the implications for contemporary accounting education. It was found that students perceive accountants as structured, precise and solitary individuals. However, students considered it to be an interesting profession. Significant differences were found between the perceptions of different ethnic groups. No significant differences were found between the perceptions of male and female students, or between Afrikaans- and English-speaking students.
 
Competence studies 
Skills tested in the study 
Computer skills/capabilities tested in the study 
Perceived importance of communication, analytical and interpersonal skills 
Perceived exposure to computer skills 
Changes in business environments have challenged the competencies (technical knowledge, skills and attitudes) of professional accountants. Accounting professions have responded by developing competency frameworks. In 2008, the South African Institute of Chartered Accountants (SAICA) issued a draft competency framework encapsulating a broad range of knowledge, skills and attributes. The objective of the study reported on here was to determine training officers’ perceptions of the knowledge and skills requirements of entry-level trainee accountants. SAICA could consider the findings of this study in the finalisation of its competency framework. The study reveals that nearly three-quarters of all the topics in the current prescribed SAICA syllabus are considered to make at least an important contribution to the knowledge requirements of entry-level trainee accountants. Although more than half the management accounting topics prescribed in the SAICA syllabus are perceived as being only reasonably important, further statistical analysis revealed that TOPP (training outside public practice) training officers disagreed significantly with their TIPP (training inside public practice) counterparts on the importance of management accounting topics and perceived them to be at least important. Except for specialised topics, all other topics covering the remaining core subjects (Financial Accounting, Financial Management, Taxation and Auditing) were perceived to be important or even more than important by the respondents. The study demonstrates that there is a movement towards an expanded set of competencies beyond the technical knowledge typically taught to prospective CAs, and that there is evidence of a need for today’s entry-level trainee accountants to receive training in communication, analytical, interpersonal and computer skills.
 
Career choice factors: means (non-CA stream)  
Purpose – South Africa, like many countries in the rest of the world, is currently facing a shortage of chartered accountants (CAs). The purpose of this paper is to examine the factors influencing the career choice of accounting students in South Africa. Design/methodology/approach – A questionnaire survey was used to assist professional institutes of CAs, universities, audit practitioners and other interested parties to understand the factors that influence students' career choices. The respondents were first-year business students at a leading South African university. Findings – The results indicate that CA students' choice is driven mainly by job security, job satisfaction, aptitude for accounting and potential future earnings. Although a high percentage of non-CA students have considered becoming a CA (61.6 per cent), they cite job satisfaction as one of the key reasons why they decided against a CA qualification. The two groups clearly have different views on job satisfaction. Another important reason the non-CA group mentioned against CA studies, was the strenuous nature of this field, including the technical difficulty of the subjects and the lengthy period of study required. Significant differences between the CA and non-CA group were evident when the means of the ratings of career choice factors were compared. All mean scores, for each of the 12 career choice factors, were higher for CA stream students, compared with the non-CA stream students. A possible reason is that CA students are more career oriented than their non-CA student counterparts. Originality/value – This study extends the literature. It investigates and rates the career choice factors influencing accounting students to become a CA and the factors that influence business students not to pursue CA studies. These results could potentially be used to develop a strategy to influence students' career choice of the CA profession in an effort to increase the number of CAs in South Africa.
 
Using exploratory research, this study analysed some of the factors that have an impact on the level of financial literacy of undergraduate students studying to become chartered accountants. The study utilised an internationally developed instrument to measure financial literacy. It investigated whether some of the factors that were identified in international studies also influence the financial literacy levels of chartered accountant students in South Africa. In line with previous international studies, the study concluded that gender, age, language, race and income levels do have an impact on the level of financial literacy. This information should enable chartered accountant firms to identify trainee accountants who might require special training in the field of financial literacy.
 
Cost management is essential in every organisation, especially in an increasingly competitive environment (Jain & Yadav 2006:352). The management of distribution costs has become increasingly important because of the rising fuel costs in recent years (Gaffney 2008:40). Delivery routes should be optimised in order to reduce distribution costs. This article presents a comprehensive segment margin approach model for determining the financial viability of delivery routes. A specific bakery (henceforth referred to as Bakery A) was selected as a case study, and the use of general management accounting principles in determining the financial viability of delivery routes was specifically investigated.
 
According to generally accepted accounting practice, the objective of financial statements is to provide useful information to the primary user groups of such statements, regardless of the size of the entity. The primary users of the financial statements of SMEs are the owners, South African Revenue Services (SARS) and bankers. The recognition, measurement and disclosure requirements of full IFRSs do not result in cost-effective and useful information being provided to the users of the financial statements of SMEs (non-listed companies, close corporations and other small entities, irrespective of their legal form), because these users do not need the extensive and complex information provided in general purpose financial statements. Consequently, an accounting standard is required to differentiate between general and limited purpose financial statements. The International Accounting Standards Board (IASB) issued an exposure draft (ED 222) on IFRS for SMEs in February 2007. These stipulated modifications relating mainly to relaxed disclosure requirements and are more applicable to medium-sized entities. According to a survey among preparers of financial statements in June 2007, these developments may not be adequate for the purposes of smaller entities, irrespective of their legal form. Accordingly, the study recommends that a formal, separate set of simplified differential reporting standards be developed for smaller entities.
 
This paper explores the changing needs of employers and the business community in relation to the balance between technical and soft skills, such as communication skills, business presentation skills and other interpersonal skills. The researcher discusses the importance of soft relational skills for all business graduates, including accountants. The study further explains how soft skills can complement the technical skills taught to ensure that graduates are equipped to deal with the demands of a complex global business environment. The needs of different stakeholders, possible barriers to change and the way in which academic faculty can contribute are reviewed.
 
Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events, International Financial Reporting Standards (IFRSs) still contain various choices of accounting treatment. Different accounting alternatives for similar transactions limit the comparability of financial information. Certain accounting policies result in differences in recognition, measurement and disclosures. This article identifies 16 such accounting policy choices and presents the descriptive empirical results on which accounting policies were in fact chosen by a sample of 157 South African listed companies, in cases where IFRSs allow a choice between alternative accounting policies. Disclosure of accounting policies is necessary for the users of financial statements to enable them to compare the financial statements of various entities in making economic decisions. The research also found a lack of disclosures relating to chosen accounting policies in limited cases.
 
The Minerals and Petroleum Resources Royalty Act (MPRRA) became effective on 1 March 2010. This legislation may have a significant impact on employment, foreign investment and future exploration in the South African mining industry. This article reports on a critical analysis of the MPRRA prior to its implementation in order to identify aspects that may impact adversely on the South African mining industry and would require further research after the implementation of the MPRRA. Based on the findings, the authors recommend that the impact of the level of royalties levied as well as the mechanism to promote downstream beneficiation be researched to establish whether the legislators ought to reconsider these provisions in the light of their impact on the mining industry.
 
This study analyses and discusses the application and constitutionality of the general onus of proof provision (section 82 of the Income Tax Act 58 of 1962 [the “Act”]), the presumption in favour of the State when criminal sanctions are applied to an offending taxpayer (section 104(2) of the Act) and the mechanics for imposing administrative sanctions in terms of section 76(1)(b) of the Act. The conclusion reached is that the reverse onus presumption, as provided for in terms of section 104(2) of the Act, is unconstitutional. It is penal in nature and offends against the constitutional right of an accused to a fair trial (sections 35(3) of the Constitution of the Republic of South Africa Act, 108 of 1996 [the “Constitution”]). The section 36 limitation of rights clause of the Constitution does not save it. Section 76(1)(b) of the Act read in conjunction with the deeming provision of section 76(5) of the Act, is inextricably linked to the section 82 general reverse onus provision of the Act. Hence, when these three sections are applied together, they create a reverse onus that, prima facie, violates the right to just administrative action (section 33 of the Constitution). Regarding the general reverse onus burden as provided for in terms of section 82 of the Act, the conclusion reached is that it is reasonable and justifiable in an open and democratic society and can therefore be regarded as constitutional.
 
The value added statement has been voluntarily reported by South African companies for many years despite reservations about its usefulness. This article examines current literature on value added statements in two areas: the usefulness of the value added statement in South Africa and the relevance of social accounting theories in explaining its continued disclosure in South African listed companies’ annual reports. It also reports the results of a questionnaire survey addressed to preparers of value added statements.The research studies examined in the literature review indicate that legitimacy theory is more likely to provide an explanation for the disclosure of value added statements in annual reports in South Africa. The results of the empirical survey indicate that the majority of the respondents are of the opinion that it is desirable to prepare a value added statement, but that it is not used in the majority of companies. Furthermore, the reasons advanced by the preparers for the desirability of the value added statement provide some evidence that legitimacy theory may be behind the propensity of companies to publish a value added statement. The article recommends that the preparation of the value added statement should be standardised. However, the disclosure of an independently prepared value added report may be more useful to all users.
 
This study explores the factors affecting the results obtained by Southern African students in the professional qualification examinations of the Chartered Institute of Management Accountants (CIMA). Thirteen variables were identified and included in a questionnaire sent to CIMA students. It was found that three variables were significantly associated with examination success: age, tuition and study material. Younger candidates, candidates who attended part-time tuition classes and candidates who used the textbooks published by BPP were more successful. Trends were also detected regarding gender, the number of papers written, and examination attempts: females tended to outperform males, candidates had a smaller chance of passing all the papers they sat if they took on more papers at a time, and first-time candidates had a higher tendency to pass than repeat candidates. Opportunities for further research are discussed.
 
Mean test marks by CBL or face-to-face teaching and prior accounting knowledge
also
This paper compares the effectiveness of in-house developed computer-based learning (CBL) materials with face-to-face teaching. Two groups of higher education students were randomly assigned to complete tutorial work in one highly structured topic of introductory accounting using either CBL materials (treatment group) or face-to-face teaching (control group). The effectiveness of both approaches was measured according to the students’ performance in a class test, in relation to their prior accounting knowledge and gender. The results showed that the students with no prior accounting knowledge who completed the CBL materials achieved a significantly higher test mark than the face-to-face teaching group. However, there was no significant difference in the marks of the students with prior accounting knowledge, and there was no difference on the basis of gender. The results of this South African study correspond to results in existing literature in other countries, and contribute to the overall knowledge of the effectiveness of CBL materials with respect to prior accounting knowledge and gender.
 
Effectively functioning audit committees have proven to fulfil a vital role in strengthening the role of internal audit. This article presents the results of a literature review that pinpoints six responsibilities that audit committees should perform in relation to internal audit. These responsibilities were tested as part of an empirical study focusing on the 40 largest companies listed on the JSE to determine the extent to which large listed companies in South Africa fulfil and disclose these responsibilities. The study consisted of an analysis of annual reports and a questionnaire administered to the chairs of audit committees. The study returned significant findings, including sound empirical evidence that the audit committees of the largest listed companies in South Africa are executing their responsibilities for internal audit effectively, but are performing more functions and responsibilities than those actually disclosed and reported on. While this apparent deficiency in disclosure may not affect the effective functioning of audit committees, it may influence perceptions about this effectiveness
 
In an attempt to enhance the core professional values of tax practitioners in South Africa, the South African Revenue Service has proposed the regulation of tax practitioners’ services. It is arguable whether or not this would be the only factor to influence the ethical behaviour of tax practitioners. A literature review was conducted to identify factors that could influence the ethical behaviour of tax practitioners. Numerous possibilities emerged. It is therefore recommended that if regulation is to be successful, caution should be exercised in writing a code of best practice for tax practitioners.
 
Biodiversity conservation tax incentives were inserted into the Income Tax Act 58 of 1962 in terms of the Revenue Laws Amendment Act 60 of 2008 and are now contained in section 37C. The objectives of this study were to quantify the maximum potential revenue loss, to National Treasury, as a result of these tax incentives granted to landowners in the Western Cape; to identify and discuss alternative policy instruments to encourage conservation; and to investigate the perceptions of landowners in the Western Cape on the tax and alternative incentives available for conservation. The study found that the maximum tax revenue foregone should amount to a tiny percentage of total estimated revenue income for the 2008/2009 fiscal year, while projected future losses could also be insignificant. Landowners prefer direct financial incentives and exemption from property taxes, and contend that direct assistance with conservation activities would also be beneficial. The use of municipal value in the valuation of land would promote objectiveness and consistency. Finally, only a third of the landowners indicated that tax incentives would encourage them to commit more land for conservation.
 
Demographic profile of respondents
Results of the Mann-Whitney U follow-up tests for Hypothesis 1
Employment status across degree of study
Results of the Mann-Whitney U follow-up tests for Hypothesis 2
Career indecision plays a major role in the way students perceive their future career prospects and how they approach these prospects. In addition, career indecision influences career-related thoughts and decisions, and plays a role in the way students formulate career goals. A convenience sample from honours students in Accounting Sciences, Financial Management, Economics and Marketing was drawn and their levels of career indecision were measured using self-administered questionnaires. The study demonstrates that differences exist between students whose employment status differs, and those who were studying for different degrees. Consequently, this study has vital implications for groups (such as career counsellors and educational institutions) involved in the career decision-making processes of university students.
 
Controlled foreign company (“CFC”) legislation, governed by section 9D of the Income Tax Act 58 of 1962, serves as anti-avoidance legislation in South Africa’s residence-based tax system. Section 9D provides for the calculation of a deemed amount which must be included in the South African resident’s income. This deemed amount is calculated with reference to the net income for the CFC’s foreign tax year. Section 9D(6) provides for this deemed amount, which is denominated in the foreign financial reporting currency, to be translated into South African rand by applying the average exchange rate for that year of assessment. The legislation refers to the South African resident’s year of assessment and not the CFC’s foreign tax year. It is submitted that the average exchange rate for the CFC’s foreign tax year should be used for translation. The author therefore disputes the period to be used in calculating the average exchange rate.
 
Economic events and key economic variables affect stock markets on a daily basis. Inflation is one such economic variable that influences share prices to some extent. This article focuses on two SADC countries, South Africa and Namibia, and measures the impact of inflation on share market prices in these countries. It can be concluded from the study that neither South African nor Namibian companies can offer investors a perfect hedge against inflation.
 
IES 3 Professional Skills, issued by the International Federation of Accountants in 2003, lists five essential skills that professional accountants need to acquire: intellectual, technical and functional, personal, interpersonal and communication, and organisational and business management skills. In education programmes, accounting students may be required to work in teams and may therefore acquire some of these skills through the team experience. IES 8, Competence requirements for audit professionals, includes “working in teams effectively” and “presenting, discussing, and defending views effectively through formal, informal, written, and spoken communication” as part of the skills requirement which should be included in the education and development programme for audit professionals. Working in teams, or cooperative learning, is a teaching technique used in the formal education phase, which enables students to acquire some of these skills. The paper uses the results of a questionnaire survey to investigate how teams function in an accounting project. Although the results indicate that skills such as meeting management and interpersonal skills have a positive effect on the students’ satisfaction with the team, no link could be found to the students’ project mark. These results suggest that skills such as meeting management and interpersonal skills, if included in the formal education phase, may contribute positively to students’ career preparedness. The study also found that students did not consider peer assessment appropriate.
 
Determining an optimal capital structure for a company is a multi-facetted problem that has challenged and fascinated academics and practitioners for a long time. This study investigates capital structures used in different countries and industries and explores the different theories on capital structure that have been put forward to date. A trade-off model, incorporating taxes and financial distress costs, is applied in determining the optimal capital structure for three companies listed on the JSE South Africa. One of the conclusions drawn from the results of this analysis is that great care needs to be taken in ensuring the reasonableness of the input data and the valuation model. Secondly, significant amounts of value can be unlocked in moving closer to the optimal level of gearing. Lastly, even when using a model such as the one illustrated, it may be preferable to try to operate within a certain acceptable interval rather than trying to attain the absolute optimum capital structure.
 
The start of the twenty-first century was marred by a spate of company collapses that involved fraudulent accounting activity. In many cases, company executives, many of whom belonged to the accounting profession, perpetrated the fraud. As a result, internationally, the accounting profession has suffered an enormous loss of goodwill, and its reputation as a profession with integrity has been severely harmed. Accounting professionals are no longer accorded the high regard they commanded in the past. The consequences for the profession have been far-reaching: accounting now faces a long, uphill battle to restore its reputation and to regain the trust of the international business community. This study replicates two famous international studies in the South African context. The focus of the study was to establish whether factors such as the Code of Professional Conduct of the South African Institute of Chartered Accountants (SAICA), the corporate ethical environment and their age influence the ethical judgement of individual accountants. The first such study was conducted in the United States of America (USA), and it was followed by similar research in Turkey. The results of these two studies suggested very different factors that could influence accountants' ethical judgement. The study reported in this article investigated South African chartered accountants; and its results were similar to those obtained in the US study.
 
New management techniques such as 'just-in-time', 'lean manufacturing' and 'Six Sigma' allow managment accountants to shift their focus from the management and control of production processes to the management of strategic issues. This paradigm shift resulted from shorter product life cycles, due to technological advances and a more competitive business environment. Recent revisions to the International Accounting Standards which are particularly supportive of life cycle costing and project management are likely to increase the focus on strategic management accounting further. This article describes developments in management accounting and the recent convergence of financial reporting in terms of International Accounting Standards with strategic management accounting and project management techniques. Strategic management accounting (particularly life cycle costing) involves applying project management techniques and using the calculus of investment to manage the project as a whole. This contrasts with managing only costs and revenues during the manufacturing phase of a project. The article demonstrates that project management techniques and the calculus of investment provide the information needed to account for the value of a project in terms of IAS 38: Intangible Assets. This will ultimately give rise to both improved decision-making and more relevant financial reporting.
 
Selected regression results
Empirical accounting research frequently makes use of data sets with a time-series and a cross-sectional dimension – a panel of data. The literature review indicates that South African researchers infrequently allow for heterogeneity between firms when using panel data and the empirical example shows that regression results that allow for firm heterogeneity are materially different from regression results that assume homogeneity among firms. The econometric analysis of panel data has advanced significantly in recent years and accounting researchers should benefit from those improvements.
 
Various researchers and practitioners, notably Stern Stewart Consulting Company andAssociates, have claimed economic value added (EVA) to be superior to traditional accounting measures in driving shareholder value. Other researchers have refuted these claims by supplying data in support of the traditional accounting indicators like earnings per share EPS), dividends per share (DPS), return on assets (ROA) and return on equity (ROE). This study endeavored to analyse the results of companies listed on the JSE Securities Exchange South Africa. Market value added (MVA) was used as a proxy for shareholder value. The findings do not support the purported superiority of EVA and in fact found stronger relationships between MVA and cash flow from operations. The study also found very little correlation between MVA and EPS and MVA and DPS, concluding that the credibility of share valuations based on earnings or dividends should be questioned seriously.
 
Entrepreneurs choose a particular way of life with the dual aim of maximising profit and gaining a sense of self-satisfaction. In these endeavours, entrepreneurs typically live with the threat of competition and the risk of business failure, while attempting to do their best within the limitations of their resources. This qualitative study first examines existing theories of ethics and ways of applying business ethics and thereafter investigates entrepreneurs' actual experiences by means of in-depth interviews and the use of phenomenology. It finds that entrepreneurs are not guided by any specific code of conduct, and must decide for themselves what is right. It describes the entrepreneurial business ethic, some of the types of dilemmas that they experience and the methods that they have developed to deal with the dilemmas.
 
This article assesses the state of cash flow reporting by listed South African industrial companies in order to evaluate whether the users of financial statements can accept them as being reliable and use them as a tool to compare the operating performance of various companies. As the cash flow statement has been in use since 1989, it was envisaged that compliance would be high. However, it was found that there are several companies that deviate from some of the requirements of AC 118 regarding cash flow statements.
 
Purpose - The purpose of this paper is to ascertain whether Fortune Global 500 companies embed stakeholder engagement in their sustainability reporting. Design/methodology/approach - Quantitative and qualitative content analyses were undertaken on 646 sustainability reports written in English over the period from 2015 to 2017. Findings - This research found a low level of stakeholder engagement disclosures and scant evidence that sustainability disclosures were drawn upon stakeholder engagement practices. The findings indicate that stakeholder engagement was loosely embedded in sustainability reporting. Research limitations/implications - Sustainability reports are the sole unit of analysis. Besides, this research is limited to a sample of companies and to a specific period, which limits the generalisation of the research findings. Practical implications - Embedding stakeholder engagement in sustainability reporting holds companies accountable to their stakeholders. This is because the companies’ sustainability disclosures acknowledge the stakeholders’ concerns and information about the stakeholder engagement methods deployed to address those concerns. Social implications - Stakeholder engagement promotes accountability by encouraging stakeholders to convey their opinions about corporate sustainability, participate in decision-making processes that impact them, and partake in defining the contents of sustainability reports. Originality/value - This paper provides insights into the need to link sustainability disclosures with stakeholder engagement disclosures, by articulating who the relevant stakeholders are and how they are engaged on the various sustainability topics – rather than conceiving them to be separate and independent disclosures in a sustainability report.
 
The auditing and accounting profession must provide appropriate disclosure of the going concern status of an entity, especially when that status is threatened. Auditors have an obligation to consider the wider legal environment of an entity, including all relevant case law, when they perform any such audit. Despite this obligation, the auditing profession appears to violate important legal principles. The auditor’s approach to the going concern status of an entity is contained in the South African Auditing Standard, SAAS 570 “Going Concern”. The South African legal framework’s approach to this issue emerges from the Supreme Court case Philotex (Pty) Ltd v Snyman. This article explores the fundamental disagreement between the auditor’s approach to the going concern problem and that adopted in terms of the wider South African legal framework.
 
The fact that Departments of Accounting at South African universities, whose academic programmes are accredited by the South African Institute of Chartered Accountants (SAICA), have for many years focused primarily only on the academic training of prospective chartered accountants, has established a culture that is removed from research, and this is in contrast to the nature of a university. The aim of this paper is to evaluate some recent developments in the South African academic environment that may promote a research culture and to point out the coercive role these developments may play in changing the existing culture of a Department of Accounting. The study concludes that in view of a list of specific recent developments in the national academic environment, Departments of Accounting will be forced to change course toward becoming more research oriented. A number of recommendations are made to expedite the process.
 
Abstract
Purpose The purpose of this study is to compare of the way intellectual capital (IC) is disclosed in the websites of the universities in three European countries to assess the way universities decide to communicate IC to their stakeholders and identify potential patterns and trends. In addition, the relation between the level and the type of IC Web disclosure in universities and academic rankings as a proxy of performance is explored to reveal interrelations. Design/methodology/approach The study is based on a sample of 128 universities coming from Greece (22), Italy (58) and Spain (48). The websites of the universities are content-analysed to measure the level of IC disclosure. The IC disclosure metrics are then correlated with the academic rankings of the World Ranking. Findings While the level of IC disclosure among universities and among countries is not homogeneous, human capital and internal capital items are more heavily disclosed compared to external capital items in all three countries. In addition, larger universities in terms of number of students tend to disclose more on IC. Moreover, there is a positive correlation between the level of IC Web disclosure and the academic ranking that challenges the IC disclosure strategies followed by the universities. Originality/value The paper represents an innovative contribution to the existing literature as it investigates websites to assess the level of IC disclosure provided by universities in a comparative perspective. Furthermore, it analyses the relationship between the online IC disclosure and European universities’ academic rankings and provides evidence on the interaction between the IC disclosure and the ecosystem in which the universities operate contributing to the fourth stage of IC research.
 
Purpose This paper is motivated by the International Integrated Reporting Council’s (IIRC) call for feedback from all stakeholders with knowledge of the International Integrated Reporting Framework , and specifically of the enablers, incentives and barriers to its implementation. The paper synthesises insights from contemporary accounting research into integrated reporting (IR) as a general concept, and integrated reporting as espoused by the IIRC in the (IIRC, 2013). We specifically focus on possible barriers and emphasise the specific issues we feel could be rectified to advance the , along with the areas that may potentially hinder wider adoption and implementation. Design/methodology/approach The paper draws upon and synthesises academic analysis and insights provided in the IR and academic literature as well as various directives, policy and framework pronouncements. Findings The flexibility and lack of prescription concerning actual disclosures and metrics in the could allow it to be used for compliance, regardless of the other benefits lauded by the IIRC. Thus we see forces, both external and internal, driving adoption, with one prominent example being the European Union Directive on non-financial reporting. Because of the different ways in which IR is understood and enacted, there are numerous theoretical and empirical challenges for academics. Our paper highlights potential areas for further robust academic research, and the need to contribute to policy and practice. Research limitations/implications The paper provides the IIRC, academics, regulators and reporting organisations with insights into current practice and the framework. We highlight the need for further development and evidence to help inform improvements both from a policy and a practice perspective. A key limitation of our work is that we draw upon a synthesis of the existing literature which is still in an early stage of development. Originality/value The paper provides the IIRC with several insights into the current , and specifically with the enablers, incentives and barriers to its implementation. Also, it provides academic researchers with a number of important observations and an agenda upon which they can build their future research.
 
Against a backdrop of only 337 black chartered accountants in a total of ap-proximately 20 000 in South Africa in 2003, the South African Institute of Chartered Accountants (SAICA) is reviewing its current transformation tar-gets for 2005. Information was required to review the obstacles that black train-ees in general and accountants in particular experience en route to qualifying. Accounting as a career was investigated from a theoretical point of view. A questionnaire was designed, which focused mainly on problems and barri-ers in respect of career guidance; funding and bursaries; role models in the profession; knowledge of the profession; and exposure to business. The ques-tionnaire was distributed to all 755 black trainee accountants that were regis-tered with SAICA. A total of 313 questionnaires were returned, representing a response rate of 41,45%. A lack of knowledge about the chartered accountancy profession and ca-reers related to the profession was identified as one of the main reasons for the small number of blacks in the profession. Career guidance at school was stated as the main contributing factor in this regard. A lack of funding and of bursaries was stated as the second most important reason why students do not choose a career in accounting. Other important barriers identified include the limited nature of the work given to trainee accountants to do and the resulting limited work experience that they gain; a lack of black mentors in firms; ra-cial bias on the part of supervisors; and a lack of recognition of and respect for the work completed. continued Views of black trainee accountants in South Africa 130 Meditari Accountancy Research Vol. 11 2003 : 129–149 Black trainee accountants suggest that academic support programmes should be introduced to assist them to prepare for examinations, a forum should be established for students of Accounting in which they can interact with accounting professionals through workshops; a network group of profes-sional black mentors in the business sector should be formed; and the ad-vancement and retention of black members within the profession should be encouraged. Awareness programmes should be accorded a high priority in the short term.
 
This study of black chartered accountants (CAs) in South Africa was undertaken to provide a profile of black chartered accountants and an overview of their work environment, including career barriers and expectations. The study identified a number of barriers experienced by black CAs in South Africa. These barriers include discrimination in respect of job assignments, racial bias, a lack of black mentors and the resistance of the clients of auditing firms. It is apparent that these barriers have changed the career expectations of many black CAs. The survey highlights the need for the profession to address the special career needs of black CAs.
 
Purpose The purpose of this paper is to assess the extent of central government financial information disclosed in accordance with accrual-based International Public Sector Accounting Standards (IPSAS) and to investigate the environmental factors affecting this level, drawing on the contingency theory framework. Design/methodology/approach This study uses a self-constructed checklist of 116 items to measure the IPSAS disclosure level by 100 public sector entities from different countries across the globe during the period 2015–2017. Panel regressions have been used. Findings The results show significant differences in compliance levels with IPSAS disclosures across nations. They reveal a positive influence of the degree of government openness (political culture), quality of public administration and management and prior experience with International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) in the public sector on this level, whereas government financial condition is a nonsignificant factor. Practical implications The research findings are potentially relevant to academics, researchers, practitioners, standard-setters and government policymakers. By examining the influencing factors of IPSAS disclosure level, this paper paves the way for further investigation of this topic with a more extensive set of micro and macroeconomic variables whether at the central or local government level in other jurisdictions Originality/value This study provides new insights into the assessment of the transparency and completeness of government accrual-based financial statements. Based on the contingency theory, this paper is the first to empirically investigate the factors affecting the level of disclosure under accrual-based IPSAS by central government entities in a cross-country analysis.
 
There is increasing academic pressure on Departments of Accounting in South Africa whose academic programmes are accredited with the South African Institute of Chartered Accountants (SAICA). The reason for this that the academic training of potential chartered accountants has long been their main academic focus, and they often fail to do justice to their real academic mission of scholarly activity in accounting (the pursuit of science as an endeavour), which is central to the essence of a university. The quality of such departments’ research is not yet an important criterion for their prestige. However, only Departments of Accounting that develop Accounting as a social science in scholarly activity in accounting deserve international recognition. This empirical study attempts to convince Departments of Accounting, particularly those whose academic programmes are accredited by SAICA, to embark on scholarly activity in accounting as soon as possible.
 
Factors of Big Data value and dimensions of IC management and accounting
Purpose As Big Data is creating new underpinnings for organisations’ intellectual capital (IC) and knowledge management, this paper aims to analyse the implications of Big Data for IC accounting to provide new conceptual and practical insights about the future of IC accounting. Design/methodology/approach Based on a conceptual framework informed by decision science theory, the authors explain the factors supporting Big Data’s value and review the academic literature and practical evidence to analyse the implications of Big Data for IC accounting. Findings In reflecting on Big Data’s ability to supply a new value for IC and its implications for IC accounting, the authors conclude that Big Data represents a new IC asset, and this represents a rationale for a renewed wave of interest in IC accounting. IC accounting can contribute to understand the determinants of Big Data’s value, such as data quality, security and privacy issues, data visualisation and users’ interaction. In doing so, IC measurement, reporting and auditing need to keep focusing on how human capital and organisational and technical processes (structural capital) can unlock or even obstruct Big Data’s value for IC. Research limitations/implications The topic of Big Data in IC and accounting research is in its infancy; therefore, this paper acts at a normative level. While this represents a research limitation of the study, it is also a call for future empirical studies. Practical implications Once again, practitioners and researchers need to face the challenge of avoiding the trap of IC accountingisation to make IC accounting relevant for the Big Data revolution. Within the euphoric and utopian views of the Big Data revolution, this paper contributes to enriching awareness about the practical factors underpinning Big Data’s value for IC and foster the cognitive and behavioural dynamic between data, IC information and user interaction. Social implications The paper is relevant to prepares, users and auditors of financial statements. Originality/value This paper aims to instill a novel debate on Big Data into IC accounting research by providing new avenues for future research.
 
Blended learning is the new buzzword in higher education. International trends in open and distance learning proclaim that the use of blended learning is essential for any distance education institution that wishes to remain relevant in an increasingly contested market. Blended learning refers to the use of a variety of technologies, pedagogies, contexts and delivery modes (such as online learning) to create a strategic mix that will increase student success. Online learning environments form a crucial part of any blended learning strategy. In the South African context, access to such online environments is a controversial issue. This article reports on a study which attempted to determine how many of the students registered for Accounting at second year level at the University of South Africa (UNISA) would benefit from a blended learning approach.
 
Diagrammatical representation of the SOA enabling layer
The fundamental difference between the IT environments
Various forms of IT sourcing used by audit clients create issues of concern for external auditors. This article investigates the nature and basic characteristics of service-oriented architecture (SOA), a modern information system architecture strategy, to ascertain whether the use of SOA by a service consumer audit client would have an impact on the activities typically performed by the external auditor. It was found that SOA presents a complete shift in the way IT application functionality is constructed and integrated and inevitably effects changes in the accounting system and the related internal controls of the SOA service consumer. As a result SOA has a significant impact on the activities performed during the audit process and introduces various SOA-related aspects that need to be considered by the external auditor of a SOA service consumer.
 
Purpose This paper aims to examine how the level of corporate governance disclosures by Spanish universities is influenced by a set of variables. Design/methodology/approach To do this, the authors carried out a content analysis of the website disclosures of all Spanish universities identified by the Universities Rectors’ Conference in Spain. Findings Results show that the amount of corporate governance information disclosed by Spanish universities is far from being adequate and does not meet the stakeholders’ demands, as well as those requirements imposed by the law. The findings have revealed that the most influential variables associated with better disclosure levels of corporate governance information are the public–private status and institution size. Originality/value Compared to the private sector, the researchers have paid less attention to corporate governance disclosures in universities. In the Spanish university context, there is limited literature on the level of corporate governance disclosures.
 
An offending taxpayer may plead "extenuating circumstances" in order to reduce the penalty or sanction that may be imposed in terms of section 76(1) of the Income Tax Act. The objective of this article is to examine whether the conduct of the taxpayer before, during and after the commission of an offence (usually tax evasion), in terms of section 76(1) of the Act or of the common law, can affect the level of the penalty or sanction imposed. The conclusion that can be reached is that, in appropriate circumstances, the conduct of the taxpayer can affect the level of a penalty imposed in terms of section 76(1).
 
Differential corporate reporting exists in one form or another in many countries and it is currently on the agenda of the International Accounting Standards Board’s (IASB’s). This article provides some background on this practice and, in particular, on the current position of the IASB and the accounting profession in South Africa with regard to differential corporate reporting. The article also reports on the results of a postal survey of South African Registered Accountants’ and Auditors’ views on the form that differential corporate reporting should take. It was found that there is some support for limited deviations from Generally Accepted Accounting Practice (GAAP), in agreement with DP 163 – Limited Purpose Financial Statements issued by the South African Institute of Chartered Accountants (SAICA).
 
This study measures and compares the expectations of two different groups – the first is selected preparers of environmental reports (ERs) in South Africa (companies and professional environmental consultants), and the second is selected users of ERs (this included environmental activists, pressure groups and non-governmental organisations [NGOs] with environmentally related objectives). The study considers the perceived importance of environmental reports, the areas that are reported on and the levels of disclosure. It compares and contrasts the expectations of the above groups. The study found significant differences between the expectations of the groups. Predictably, the responses of the users showed expectations of higher levels of disclosure than those of professional environmental consultants, who in turn expected higher levels of disclosure than company respondents. Significant differences were found between the responses of the groups with regard to the importance of specific areas of environmental disclosure. The study shows that there is evidence of a gap between the expectations of the different groups, and hence that there is a need for improved environmental reporting in South Africa.
 
Users of annual reports require an extensive range of financial and non-financial information, whether mandatory or voluntary, in order to assess the fair value of an investment. The extent and quality of voluntary information is dependent on company policy, and companies need to make decisions in favour of or against the disclosure of certain informative items. A survey was conducted to examine the perceptions of the compilers and the users of annual reports on the price-informative value of voluntary disclosures in annual and interim reports. The rankings awarded by compilers and users to the various voluntarily disclosed items were compared in order to determine the significance of the differences between the perception of the two groups. Significant differences were identified and suggestions are made for the improvement of corporations' voluntary disclosure strategies.
 
Historically, South Africa’s apartheid policies had a negative effect on the financial performance of the South African beverage industry. This effect was characterised by the non‐participation of South African companies in the global market and the presence of foreign enterprises in the domestic market. From 1994, South African industries have been increasingly exposed to new opportunities and forces. Globalisation, deregulation, changing manufacturing systems and the entry of foreign competitors in the 1990s exposed the local industry to competitive challenges in the domestic and the global market. This study examined the impact of changing levels of competition on the performance of strategic business units and the mediating role of management accounting in the South African beverage industry. The methodology employed to investigate this relationship comprised both a survey and a case study. The results indicate a positive correlation between the level of competition and the performance of business units. The results furthermore indicate that enterprises can utilise a management accounting system (MAS) as a strategic response to competition. The increased use of MAS will, in turn, improve the performance of an enterprise. Enterprises that do not respond positively to competition will not survive.
 
Purpose By looking at both theoretical and empirical findings, this study aims to investigate whether gender diversity results in improved corporate governance and financial performance for companies. Design/methodology/approach An analysis of the board composition of the Johannesburg Securities Exchange Top 40 companies as at 30 June 2013 and a comparison of the financial performance of the company were conducted. Findings Female directors were found to make up, on average, 18.78 per cent of the board of directors, with the majority of these women being in non-executive positions. Women representation appears to influence company performance positively when using accounting-based measures of performance (such as return on assets and return on equity), but negatively when using market-based measures (such as Tobin’s Q). The critical mass concept is also assessed and is found to have a positive effect. Originality/value These findings are of relevance to the boards of directors adhering to corporate governance requirements by challenging the role of women on the board of directors, as well as that of investors and those in practice, to understand the current status of women representation.
 
Top-cited authors
Matteo La Torre
  • Università degli Studi G. d'Annunzio Chieti e Pescara
John C Dumay
  • Macquarie University
Charl De Villiers
  • University of Auckland
Marita Blomkvist
  • University of Gothenburg
Svetlana Sabelfeld
  • University of Gothenburg