Island of excellence in sea of mediocrity
South Africa’s accountancy graduates are leading the pack
PRAISE Ndebele, a pupil from Ponelopele Oracle Secondary School in Ebony Park, Gauteng, has won the National Pastel Accounting Olympiad, organised by the South African Institute of Chartered Accountants (Saica).
He beat 4 465 Grade 11 and 12 pupils from 338 schools across South Africa last week. The Olympiad is one of many programmes run by the institute.
For the past two years, the World Economic Forum’s global competitiveness report has rated South Africa number one in the world for the “strength of its auditing and reporting standards”. South Africa produces some of the very best chartered accounts, an entirely home-grown achievement.
Central to this success is the institute, the professional body that acts as the regulator for the standards set in the industry. It is a public-private partnership largely free of government influence. By working together with universities and the private sector, as well as the auditor-general’s office, it operates as an omnipresent check and balance for quality control.
The result is that South Africa has come to dominate the industry. It is estimated that some 2 500 South African chartered accountants work in London and about 20% of all South African chartered accountants are working overseas.
Back home, there are just fewer than 20 000 chartered accountants registered.
A recent survey of 194 companies listed on the JSE showed that 32% of CEOs and 75% of chief financial officers were chartered accountants.
Chantyl Mulder, the institute’s senior executive responsible for professional development, transformation and growth, said of its vision: “We have to strive for the country to be excellent [because] we have become so satisfied with mediocrity.”
It takes seven years to become a chartered accountant — three years of study in accountancy, a further year of postgraduate education and then three years of learnership in the industry.
The big accounting firms all have Saica-accredited training offices and, because its trustees and board members are drawn from private sector senior management, they all have a vested interest in maintaining high standards.
Mulder said these partnerships and the leadership they engender was critical.
“Good leadership is absolutely central. We work closely with all stakeholders to ensure everyone is on board and focused on the same goals.”
FirstRand CEO Sizwe Nxasana is the chairman of Saica’s Thuthuka Bursary Fund. He said the industry required “excellence”, and an inability to meet that standard would be self-defeating. The industry was “well organised” and had at its disposal “people who drive the right ethos while working together with relevant stakeholders from other fields”.
It is a paradox that every year the auditor-general’s office — which, thanks to Saica, enjoys a Treasury-like reputation for competence — finds significant mismanagement and poor reporting standards in municipalities, national departments and public entities.
“They simply have the wrong skills,” Mulder said. A contributing factor to this is the discrepancy between public and private sector wages, which can be as much as R300 000 a year.
However, it is a matter of priorities, she said. “These positions are critical and, if they are serious about good financial management, they should have the appropriate resources behind it.”
The government has not been blind to Saica’s successes.
Two years ago, the human resource development council was established. Reporting to the deputy president and housed in the department of higher education and training, it has attempted to capitalise on those best-practice standards the industry has set.
One of its task teams, of which Mulder is a member, is designed to develop professionals in critical sectors such as engineering, health and education. Its influence is beginning to be felt. Fifty further education and training colleges now have acting chief financial officers appointed by Saica to assist with their financial management.
Mulder is adamant that if South Africa’s generally poor public sector accounting is to be fundamentally improved, these sorts of interventions need to be increased. “We need to professionalise the public sector,” she said.
And because it works so closely with the private sector, Saica has the money to do it. Its Thuthuka bursary fund programme, which targets black and coloured students, introduces roughly 1 000 new people into the system every year. At R80 000 a head, it is an R80million commitment. But it demands a high standard in return— 70% must pass or a university risks losing having such students placed with it, so there is a builtin incentive for universities to maintain standards too. Again, the public-private partnership is evident. The fund’s trustees are all CEOs of big financial services firms.
Jabulani Nkosi, who participated in the programme, said: “So far the journey to becoming a chartered accountant has been mentally and physically challenging. It definitely requires a lot of hard work to succeed.”
Nkosi is an audit trainee at Deloitte & Touche, having finished fourth in his postgraduate class.
Mulder said Saica was an example of “African success for Africa”, an attitude borne out by the increasing number of students from elsewhere on the continent who study accountancy in South Africa.
Suresh Kana, CEO of PwC and the incoming Saica board chairman, said: “We have a responsible leadership mindset, never succumbing to mediocrity.”
It all seems to be working. South Africa is leading the world in this field and in chartered accountancy we have an industry much pride can be taken from. The test now will be to see to what extent it can be replicated elsewhere.