SEPTEMBER 2021
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HOME OF THE PROFESSIONAL ACCOUNTANT (SA)
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Foreword Welcome to the first in a series of digital magazines for the South African Institute of Professional Accountants (SAIPA) and its upcoming “Join the accountancy revolution” iNdaba. This first edition unveils the main topics to be covered during this virtual event, and introduces some of the key speakers. It also takes a glimpse at the impact technology is likely to have on the accounting profession and professionals, and Professor Rashied Small, Executive of the Centre of Future Excellence at SAIPA discusses how professional accountants are set become major players in the quest to create strategic value from corporate data. Shahied Daniels, Chief Executive of SAIPA elaborates on what professional bodies like SAIPA do to minimise misconduct and crime.
CONTENTS Steyn City
page 2 TM
Draftworx Cloud
page 5
SYSPRO – What is ERP?
page 6
Impact of technology on the accounting profession SAIPA Accounting Indaba announced Meet the Speakers
page 7 page 8 page 9
PPS Short-Term Insurance
page 10
Minimising misconduct and crime
page 12
SYSPRO – Building a legacy
page 15
Assurance on corporate data value
page 16
SAIPA
page 18
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IFRS IFRS-SME Consolidation CC NPO/NPC Body Corporate Trust Sole Proprietor Partnership Monthly Management Pack
Compilation Accounting Officer Independent Review Audit (Coming soon)
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POWERING UP THE PROFESSION The impact of technology on the accounting professional It has become common to see headlines that suggest technology will bring an end to traditional professions – and accounting is not spared. Intelligent technology is shaping the future of accounting by impacting the types of jobs that will become available. As advanced systems handle repetitive work, humans will deal with more of the analysis, becoming the crucial link between data and clients. Technology will continue to impact the role of the accountant and the demand for accountants in the future. According to the South African Institute of Professional Accountants (SAIPA), the use of technology across industries is changing the nature of work. In a discussion with senior members of SAIPA on the impact of technology in the accountancy field, it was highlighted that technology should be viewed differently – as an enabler and a tool to make better decisions. According to Faith Ngwenya, SAIPA Executive Technical & Standards, technology will become an important enabler in the accountancy profession if it is used as a complementary tool. This means that technology should be viewed as an information provider, with the professional playing the roles of analyst and decision-maker. In addition to giving the professional the ability to “look into the past and future”, in some instances, technology also provides for information and data storage functionality. While there are many benefits to this,
it comes with a multitude of cybercrime risks. Mitigating against these risks and ensuring that information is secure are now also important considerations for the professional accountant. All of these changes mean that professionals need to be better prepared for a rapidly-changing landscape. This is where SAIPA comes in, by ensuring that training institutions are equipping professionals for this evolving world. Part of this process includes ensuring that technological systems are part and parcel of the tools used in training programmes, instead of just textbooks. According to Professor Small, who heads up SAIPA’s Centre of Future Excellence, “instead of just teaching (from the) textbook, we are teaching what the textbook says in the digital environment”. This will empower professionals to use and maximise the tech tools now at their disposal – and in the process, will create future-ready accountants with competence. In addition to this, SAIPA is working towards upskilling experienced professionals with new skills so that they can remain relevant and proficient. All of these efforts are likely to see professionals playing changing yet increasingly critical roles with the support of technology. Accountants have every reason to embrace technology – both for the betterment of themselves as professionals and to ensure that their skills can better serve society.
ACCOUNTANCY REVOLUTION join
THE
– INFONOMICS AND SUSTAINABILITY
2 & 3 Nov 2021
TWO DAYS ONE INTERNATIONAL CONFERENCE A HOST OF WORLDCLASS SPEAKERS AND DYNAMIC THINKERS The countdown to the virtual accountancy event of the year has officially begun. Catch all the action as we unpack infonomics and business sustainability by securing a front row seat to conversations led by some of the best minds in industry.
Secure your 2021 Accounting iNdaba tickets at 2020 rates
Register on: www.mysaipa.co.za Early bird bookings close September 30 2021 | Ts & Cs Apply
Not a member? Create your own profile and register
• A totally virtual experience, join us from anywhere in the world.
WHAT TO EXPECT
• Interact with world-renowned expert speakers and industry leaders, as they review the important role professional accountants will play as interpreters of corporate data to provide rich insight for strategic decision-making.
Listen to and engage with some of industry’s most brilliant minds as they unpack topics such as: • Tax and digitisation (4IR) • Understanding value creation • How to assess the integrity and quality of data that drives value change in organisations • The role of the professional accountant as Chief Value Officer (CVO) and the need for integrated thinking for business sustainability • Cybersecurity in a cloud accounting environment • Taxation in a digital economy, and the dreamversus-reality status of cryptocurrency • The role of professional accountants in reducing fraud and corruption • The value of information • The roles of future professional accountants
Visit the SAIPA website for more information
PPS Short-term Insurance serves members with enriched value proposition PPS SHORT-TERM Insurance has introduced an enriched and differentiated “private client” service experience to its time-scarce members in the professional market that improves the service experience. “We are acutely aware that the short-term insurance industry, both locally and globally, is undergoing significant shifts as the impact of Covid-19 continues to drive behaviour change and needs in the area of motor vehicle and home insurance, especially when it comes to simplicity and flexibility,” says Werner Bosman, CEO of PPS Short-Term Insurance.
The Future of Motor and Home Insurance – What do customers want? - a report compiled by Deloitte, following a survey conducted in October 2020 among 8 000 customers from eight countries (Australia, Canada, China, Germany, Italy, Japan, the UK and the US) - identified core insights that will help the industry to grow. These include: • Customers favour simplicity. They want products that are easy to understand, purchase and use. They also want to be confident that they are paying a fair price and that claims will be paid fairly. With this insight, insurers can use a human-centred approach to redesign products and exceed customers’ expectations. • Insurance embedded into other services and in new product designs is strong in some customer segments, but varies considerably by country. • Internet-connected offerings, such as motor telematics and home insurance linked to home sensors, cause apprehension among many customers. They do not feel comfortable sharing data from car and home sensors with insurers. • The Covid-19 pandemic is increasing demand for adjustable cover and pushing people towards transacting via online channels. This behaviour is unlikely to revert to pre-crisis norms for many people. “This is also coming through more strongly among our members, who are seeking value enrichment and innovative self-service options in managing their short-term insurance policies and products,” adds Bosman. “We recognise that time, convenience, privacy and simplicity are important for professionals who rely on a superior value offering. “The private client service experience is aimed at creating exceptional engagements with our members, and the first of our innovations is in the area of concierge services - one of the key trends, along with personalisation, that has been identified for the industry.”
About PPS Short-Term Insurance
PPS Short-Term Insurance is a wholly-owned subsidiary of PPS Group, a financial services company that provides a comprehensive suite of financial and healthcare solutions exclusively to graduate professionals.
“PPS Concierge Services is the kind of differentiation that our members – the graduate professional market – expect as private clients, as it places control in the hands of the user through innovative self-service offerings.” Members of the PPS group who also have short-term insurance through PPS Short-Term Insurance, will have access through a bespoke app to not only view their policy information, request amendments and submit claims easily, but also to access unique concierge services. The beneficial services include security services such as identity theft alert, which gives members a “heads-up” of potential breaches and a panic button that gives them 24/7 assistance, should the need arise. Members also have access to a vehicle licence renewal facility and six chauffeur trips a year.
PPS Short-Term Insurance provides tailored products and services for professionals, and their practices. Our insurance offerings include a number of benefit-rich cover options for motor, house and business. Members with qualifying PPS life risk products receive Profit-Share. Additionally, PPS Short-Term Insurance members enjoy complimentary value-added services that includes PPS Concierge Services, designed with the professional in mind and accessible on the PPS Short-Term Insurance app. Visit https://www.pps.co.za/protectinsure/carhomeinsurance for more information.
“Innovation in serving our members remains at our core and we will be keeping a close watch on shifts in the short-term insurance space, both locally and globally, to ensure we continue to deliver unique solutions to our graduate professional members,” explains Bosman. PPS Short-Term Insurance provides its unique customers - graduate professional members - with specialised, tailored short-term insurance solutions that address the specific needs of the professional market. The unique edge is that it operates under the ethos of mutuality. This means that members holding qualifying products get to share in the profits generated by the PPS group.
PPS Short-Term Insurance is a licensed Insurer and authorised FSP.
What professional bodies do to minimise misconduct and crime Authored by: Shahied Daniels, Chief Executive at the South African Institute of Professional Accountants (SAIPA) The primary responsibility of every accountant is to serve the public interest first. But, as asked by the Roman poet Juvenal, “Who will guard the guards themselves? Who ensures accountants remain accountable?” This is the function of professional accountancy organisations (PAOs), like the South African Institute of Professional Accountants (SAIPA). And it is the reason every accountant should be a member of such an association. Obligations of the PAO The history of accountancy can be traced back more than 7 000 years to Mesopotamia. It started with humble occupations such as shepherds, who were required to return the same number of animals put in their care and to give account of any gains or losses. As business became more complex, the demand for accountability and faithful representation grew. The modern PAO exists not only to serve its members’ needs but to strengthen these two essential pillars in the public interest as well. They are bound by a self-regulatory mandate to ensure their affiliates comply not just with standards and regulations but legislation as well. So PAOs are likewise accountable to the public to minimise the commission of financial crimes by their members. All PAOs fall under the oversight of a global standards-setting body. In SAIPA’s case, this is the International Federation of Accountants (IFAC). As an IFAC member, the institute is obliged to conform to its operating model for PAOs, which includes a strict disciplinary process. Disciplining accountants In fact, SAIPA has four distinct practices to ensure its members adhere to its high standards for professional excellence and ethical conduct.
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Firstly, everyone who applies for SAIPA membership must submit to a Professional Evaluation (PE) that tests both their technical competence and ethical appreciation. This ensures each candidate meets the minimum standard of competency required to deliver work at a level of proficiency demanded by society. Anyone unable to pass the PE or meet the Recognition of Prior Learning (RPL) requirements will not be admitted as a member of the institute. Secondly, there is an institutional Code of Conduct. This is modelled around the International Code of Ethics for Accountants, itself published by the International Ethics Standards Board for Accountants (IESBA). Every year, members must make a pledge to remind them that their adherence to this code is obligatory. The pledge can be compared to the Hippocratic Oath taken by doctors, with members solemnly swearing to live by its guiding principles. That ritual is followed by a one-hour session that reviews their professional obligations and the consequences of violating them. Thirdly, SAIPA’s investigative and disciplinary process is of the highest order. It employs legal expertise to address claims of wrongdoing while handling cases in a fair and equitable manner. An accountant found guilty of misconduct will be disciplined according to the severity of their transgression. This can range from having their membership revoked to a simple fine or warning. Fourthly, its continuing professional development (CPD) programmes demand that its members pursue lifelong learning to maintain their competence. SAIPA has made ethics a compulsory CPD topic to ensure this quality is deeply embedded within its community. In addition, CPD capacitates members to remain relevant in a changing environment marked by 4IR and increasing regulation of the profession. Finally, CPD ensures members carry out their duties appropriately in client, employment, and other relationships. Although implementation varies, other PAOs typically follow a similar model. Public protection There are several mechanisms available to the public to ensure they are dealing with a reputable accountant. The first is to only engage practitioners who are affiliated with a recognised PAO and confirm that they are in good standing with that body. Unregulated accountants present a real threat because they are not answerable to a regulator, are not
“As business became more complex, the demand for accountability and faithful representation grew. The modern PAO exists not only to serve its members’ needs but to strengthen these two essential pillars in the public interest as well.”
bound to a code of ethics, and are not forced to adhere to recognised accounting standards. They are also legally restricted from providing certain services. Official designations, like SAIPA’s Professional Accountant (SA), are registered under the National Qualifications Framework (NQF). So PAOs have the responsibility of informing the South African Qualifications Authority (SAQA) if a member’s title has been revoked. SAQA will then remove that person from its own database for that qualification. Anyone can check with SAQA that their accountant holds the title they say they do.
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Newer processes, like SAIPA’s e-certificate system, employ online technologies to make validating an accountant’s good standing much easier. One needs to only click on the practitioner’s email badge or scan its accompanying QR code to be taken to a tamperproof digital membership certificate online. In the case of a banished accountant, the certificate will clearly state that the holder is no longer linked with that body. As a last resort, the name of a member found guilty of repeated misconduct, to the degree that they are expelled from the institute, will be published. Further, their expulsion from one professional body will be binding across all PAOs. Concerned parties can therefore contact any of these associations to confirm that their accountant is not listed as a banned offender. These steps afford the public a reasonable level of protection against accountants deemed not worthy to practice. Public participation With education and training, PAOs facilitate professional and ethical conduct. By their investigative and disciplinary processes, they confront individual cases of apparent malpractice. Through cooperative efforts, they deny membership to serious offenders, severely hampering their ability to practice. And they ensure that the means exist to identify and avoid expelled members. However, these initiatives can be significantly amplified by the participation of the person in the street. Members of the public are often the first to come into contact with financial crimes, questionable practices and professional misconduct. It is therefore imperative that organisations have reliable whistleblowing processes in place. This provides the security people need to report wrongdoing without the fear of retaliation. SAIPA offers an independent whistle-blowing system as part of its investigative function. It can also receive tips indirectly through its network of industry partners. Public assistance can have a massive impact on identifying perpetrators and ensuring they face justice. Conclusion While PAOs are not legally empowered to punish financial crimes, they are duty-bound to promote integrity in their ranks and minimise wrongdoing. They also have at their disposal considerable power over the ability of wayward members to continue practising uninhibited. At the same time, members of the public need to support their efforts. Ultimately, accountancy belongs to everyone and it is everyone’s responsibility to restore it to a position of trust within our global society. By passing blame we will achieve nothing. By working together, we will make a measurable and lasting difference.
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Professional accountants to offer assurance on corporate data value A new publication, titled The Professional Accountant’s Role in Data, proposes that accountants will become major players in the quest to create strategic value from corporate data. “Through their expertise and experience, accountants are well positioned to bring maximum order, certainty, compliance and utility to this process,” says Professor Rashied Small, Executive of the Centre of Future Excellence (CoFE) at the South African Institute of Professional Accountants (SAIPA). The paper was released by the International Federation of Accountants (IFAC), of which SAIPA is a voting member. A data explosion The world is being flooded with data that organisations want to use to their advantage. At the same time, increasing global regulation, aimed at protecting the public, is redefining its legitimate use. Moreover, the integrity, quality and reliability of data used in decision-making have been limited for too long, resulting in poor data and, as a result, ineffective decisions. “Data used to be a simple collection of ones and zeros in the digital era, but today reflects both business and public concerns that accountants are qualified and well positioned to manage,” says Small. TM
The data management value chain According to the paper, data progresses across several linked phases as it passes through and between organisations. It calls these the data management value chain, a term that highlights the value of data as the currency of the digitalised and technology environment. The phases and the management roles involved comprise: data gathering by data engineers, data sharing by data controllers, data insights by data scientists, and communication by strategic advisors, each of which future-ready professional accountants will become major role players. The document concludes that accountants can extend their existing financial data management expertise to adopt any and all of these roles. Data assurance A core function of accountancy is to provide professional assurance on the integrity of financial information. In the same way, the policies, sources, structures, transportation, traceability, analytical methodologies and even strategic application of data need to be exposed to the same exacting professional scepticism accountants insist on. “This will guarantee that decision-making data and its associated data management practices have integrity, are fit for purpose and align with strategic outcomes,” says Small. Strategic business advisor Most important, according to Professor Small, is the accountant’s ability to clearly communicate the meaning and limitations of the data and offer guidance on applications for which it is valid and best suited. As data becomes a critical component in business transactions, sometimes even being sold on to third parties, its integrity, ethical use and compliance with privacy and protection regulations must be clearly understood by all stakeholders.
Professor Rashied Small, Executive of the Centre of Future Excellence.
Future excellence As mentioned in the paper, accountants mainly deal with structured financial data and will need to be trained up, on the full data management lifecycle, which includes unstructured datasets. In 2020, SAIPA launched its CoFE for this very purpose. Headed by Professor Small, the centre monitors trends emerging from global digital transformation and the fourth industrial revolution. He says it also focuses on the soft skills that accountants will need for excellence in communication and collaboration. “In the future, when companies need guidance on data matters, they won’t turn to the tech industry first but rather their futureready professional accountant,” Small adds. TM
YO U R W E A LT H
Professional Accountant (SA) is not just a professional designation. SAIPA
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Y O U R W E A LT H
IT’S A SEAL OF TRUST.
SAIPA members aim to provide the highest level of expertise and service to clients and are bound by the Institute’s Professional Conduct Standards and Ethical Pledge. They also act as trusted business advisors, assisting and driving businesses to not only survive but thrive.
SAIPA – DEVELOPING FUTURE-READY PROFESSIONALS www.saipa.co.za info@saipa.co.za
