Finweek English Edition - - To My Mind -

free mar­ket econ­omy has been turned on its head over the past few months by the un­prece­dented in­ter­ven­tion by its cen­tral banks to pre­vent a to­tal col­lapse of lead­ing fi­nan­cial in­sti­tu­tions. Those dras­tic mea­sures, un­com­fort­ably rem­i­nis­cent of a so­cial­ist sys­tem, raised se­ri­ous ques­tions about the state of present-day cap­i­tal­ism, which has al­ways been held to be the an­tithe­sis of so­cial­ism.

The mess in which fi­nan­cial in­sti­tu­tions have been dumped is largely the re­sult of a lack of ad­e­quate reg­u­la­tions, which led to the cre­ation of in­ge­nious de­riv­a­tive in­stru­ments in the field of sub-prime mortgages.

By con­trast, proper rules and reg­u­la­tions are, rightly, given much of the credit for SA with­stand­ing the world­wide credit cri­sis rel­a­tively well. In ad­di­tion to our banks, which are highly rated in­ter­na­tion­ally for their healthy con­trol mea­sures, the qual­ity and ap­pli­ca­tion of ac­count­ing stan­dards have al­ways been above sus­pi­cion. In fact, SA was one of the first coun­tries to in­tro­duce the de­mand­ing new In­ter­na­tional Fi­nan­cial Re­port­ing Stan­dards (IFRS).

Fur­ther­more, the train­ing of char­tered ac­coun­tants in SA has al­ways been im­pec­ca­ble – thanks not only to ex­cel­lent train­ing at our uni­ver­si­ties, but also be­cause of the strict stan­dards set by the SA In­sti­tute of Char­tered Ac­coun­tants (Saica). The re­cent re­ports about Saica threat­en­ing to strip the Uni­ver­sity of the Wit­wa­ter­srand’s School of Ac­count­ing of its ac­cred­i­ta­tion were dis­turb­ing as well as re­as­sur­ing.

Re­as­sur­ing, be­cause Saica – in prop­erly ful­fill­ing its su­per­vi­sory role – sends its train­ing com­mit­tee to uni­ver­si­ties ev­ery three years to make sure all its cri­te­ria are be­ing met, and is now tak­ing re­me­dial steps.

Dis­turb­ing, be­cause the main rea­son for Saica’s find­ings that the train­ing at Wits – and, ap­par­ently, at other SA uni­ver­si­ties – doesn’t meet the re­quired stan­dards is a lack of re­sources. The depart­ment ad­mits it doesn’t have enough staff, es­pe­cially in the fields of tax, fi­nan­cial man­age­ment and ac­count­ing. In ad­di­tion, the depart­ment’s act­ing head ap­par­ently has no ac­count­ing back­ground.

The lack of skills in this coun­try is lamented of­ten, like the re­frains of sad bal­lads about lost op­por­tu­ni­ties. Though the first lines were un­de­ni­ably writ­ten dur­ing the apartheid years, when in­ad­e­quate ed­u­ca­tion mis­er­ably failed large por­tions of our pop­u­la­tion, a topsy-turvy ap­proach by the new regime since 1994 has had an equally neg­a­tive ef­fect.

An ob­ses­sion with “empowerment” – which of­ten re­sulted in the ar­ti­fi­cial pro­mo­tion of se­lect in­di­vid­u­als – meant the es­sen­tial uplift­ment of peo­ple through proper teach­ing – true empowerment – was ne­glected. That short­sighted ap­proach re­minds one of the self-de­struc­tive slo­gan of “lib­er­a­tion be­fore ed­u­ca­tion”, which pro­duced a whole gen­er­a­tion of un­e­d­u­cated young peo­ple.

If the new regime had made qual­ity ed­u­ca­tion a pri­or­ity from the very beginning in 1994, there would now have been nearly a full gen­er­a­tion who had re­ceived good ed­u­ca­tion, SA’s skills lev­els would have been very dif­fer­ent and we’d not cur­rently be stuck with a short­age of 22 000 CAs.

One can only hope that the shock­ing find­ings at Wits will bring to their senses those in Gov­ern­ment re­spon­si­ble for the crit­i­cally im­por­tant teach­ing port­fo­lio so that they will re­alise that ur­gent action is re­quired in or­der to pre­vent the coun­try, al­ready hope­lessly in­ad­e­quately equipped in fields such as health­care and crime preven­tion, from los­ing its wel­learned sta­tus gained through the ap­pli­ca­tion of high ac­count­ing and fi­nan­cial stan­dards.

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