bluuebunny/crossref_metadata_2025 huggingface dataset:
A dynamic balance model for analysts and managers
Authors: Gouws D.G. , Lucouw P.
Published: August 2011

Thinking and research in respect of accounting and finance over the past three decades have been dominated by a methodology that is primarily based on the predictability of accounting data and its relationship to certain phenomena. The magnitude of change in business makes the future unpredictable. Analysts and managers are confronting an entirely new business environment in which traditional approaches are no longer valid. A systems approach provides a new way of looking at financial analysis. The purpose of this study is to focus on the present, on the ability to cope and the capacity to change in a changing environment. The ability to create an own future is being seen as more important than the art of predicting the future. This paper describes an empirically tested dynamic balance model to establish whether entities are able to adapt, survive and prosper.
The choice of a cost base for product pricing
Authors: Govender D.
Published: August 2011

The purpose of this paper is to report on the incidence of the choice between full‐cost and variable‐cost pricing, and to examine the factors that could possibly influence this choice. The findings indicate that whereas 74,5% of the firms use full cost for pricing their products, only 25,5% use variable costs. The research provides evidence that supports the size of the company, product type, stage in product lifecycle, materiality of fixed overhead costs and the objectives of the company as significant variables influencing the choice of the cost base for product pricing.
Red flagging as an indicator of financial statement fraud: The perspective of investors and lenders
Authors: Koornhof C. , du Plessis D.
Published: August 2011

There is increasing international concern about the escalation of fraud and, in particular, financial statement fraud. Detecting financial statement fraud and proving such fraud remains an elusive goal. Red flagging is an early warning system that has been used by auditors to determine the probability of financial statement fraud. The purpose of this research project was to survey investors and lenders in South Africa on their use of red flags and to obtain their opinions on the relative importance of individual red flags. A questionnaire was sent to banks that are registered with the Registrar of Banks (representative of lenders) and to portfolio managers registered with the Financial Services Board (representative of investors). The research findings indicate that lenders and investors in South Africa appear to be aware of the benefits of red flagging as an early warning system. A structured approach (questionnaires/checklists) in using them is to be lacking at present. Respondents rated all red flags in the questionnaire as being important. No distinction was discernable among the different categories that were based on the nature of red flags.
Obstacles in establishing and operating a public sector internal auditing function in a developing country:
The South African experience
Authors: van der Schyf D.B.
Published: August 2011

The point of exit in this research is that there should be an internal audit department in a national government department in South Africa to render a top‐class internal auditing service that is cost‐effective and affordable, preferred by clients, continuously complies with the standards of professional practice of internal auditing and best practice and have a positive impact on the national government department’s bottom line. The empirical research has highlighted several factors, including the ignorance of key role players and lack of professional proficiency on the part of internal auditors, as factors that impede the establishment and operation of an internal auditing function in the public sector in South Africa. It is recommended, that audit committees in the public sector should launch a joint marketing action, directed at key role players, to promote the potential value of a top‐class internal auditing service in the public sector, as well as the factors that impede it.
Organisational problems in respect of the implementation of activity‐based costing in South Africa
Authors: Wessels S. , Shotter M.
Published: August 2011

In this study the extent and nature of organisational problems that are encountered in South Africa in respect of the implementation of activitybased costing are examined and compared with difficulties experienced by companies in the British Isles, United States of America and Australia. The investigation comprised a literature survey as well as an empirical study of the companies listed in South Africa. Contrary to the findings of overseas studies, South African companies experience less difficulty in respect of support from senior management and considere the employee resources allocated to the ABC projects to be adequate and satisfactory. ABC objectives are aligned with organisational goals, culture and company strategy. However, whilst implementers are adequately trained, the insufficient training of users and managers is perceived to be a hindrance to success and in the majority of companies other priorities take precedence to the ABC project.
Does “dividend investing” have value for the South African investor?
Authors: Wolmarans H.P.
Published: August 2011

A number of portfolio strategies have been proposed, based on the dividend yield of a small number of large companies. It has been suggested that, by following any one of these strategies, a return that is superior to that of the market can be obtained. In this paper, these portfolio strategies are tested for investors on the Johannesburg Stock Exchange. However, not only are strategies based on dividend yield scrutinized, but also comparable strategies based on earnings yield. The average return of various portfolios, selected in accordance with four methods of ranking, are compared. The major finding is that earnings yield is a better ranking method than the dividend yield method.
Pre‐qualification education of registered accountants and auditors in South Africa: Perspectives on whether the education process is normatively justifiable
Authors: Botha W.J.J.
Published: August 2011

In order to ensure that registered accountants and auditors (RAAs) discharge their functions in the public interest, the RAA profession, through its governing bodies, should establish, maintain and ensure compliance with among other things an identified set of educational requirements. The research objective is twofold: Firstly, to provide a normative description of pre‐qualification professional education and, secondly, to evaluate the extent to which the current pre‐qualification education process applicable to RAAs in South Africa is normatively justifiable. A study of the literature on general professional education and on education in the field of accountancy facilitated the achievement of the first objective, while the second objective was addressed by means of a comparative analysis of the basic prequalification educational requirements applicable to prospective RAAs and the normative description of professional education presented. The current educational process permits latitude for factors and practices that are not wholly justifiable within a normative definition of professional education. The lack of normative justification for several aspects of the system will impede the achievement of sound educational objectives.
The relationship between the new IIA Standards and the internal auditing profession
Authors: Coetzee G.P. , du Bruyn R.
Published: August 2011

The Institute of Internal Auditors is in the process of developing new standards for the internal auditing profession. The first set of these standards will be implemented with effect from 1 January 2002. The purpose of professional standards is to lay down the minimum requirements to be maintained for acceptable practice. In June 1999, a new formal definition of internal auditing was adopted to address relevant issues with which internal auditing is currently faced. Existing standards, when read in conjunction with the new definition, have deficiencies and these deficiencies have led to the development of new standards for the profession. The purpose of this article is to discuss the limitations of the current standards, to identify the changes incorporated in the new standards, and to evaluate the changes. The article evaluates whether the new standards address the changes in the new definition and highlights the influence of the changes in the standards on the internal auditing profession. The findings are that the new standards are difficult to analyse, especially because the current standards must still be used in conjunction with the new standards, yet the changes successfully address the challenges facing the internal auditing profession.
Industry differences in respect of corporate environmental reporting in South Africa: A research note
Authors: de Villiers C.J. , Lubbe D.S.
Published: August 2011

Previous research has revealed industry differences in respect of environmental reporting in South Africa. However, these studies concentrated on particular types of environmental reporting and therefore precluded many other types of environmental reporting in the annual reports surveyed. Past surveys also awarded equal credit to any reference to a particular type of environmental information, whether it comprised a single sentence or several pages. The annual reports of the top 100 companies, in terms of market capitalisation, were analysed and a sentence count of environmental disclosure was done with the use of the Hackston & Milne (1996) methodology. The group of energy companies was defined as comprising companies in energy‐intensive industries or companies that are producers of energy carriers. The survey revealed that these companies disclosed significantly more environmental information than other companies, in total and in each category These findings are consistent with the notion of legitimacy, which holds that companies cannot prosper if their aims and methods are not perceived to be in line with that of society. For this reason, companies that have the most obvious environmental impact tend to disclose more environmental information than other companies in an effort to legitimise their aims and methods in the eyes of society.
The impact of inflation and stock prices in two SADC countries
Authors: Geyser J.M. , Lowies G.A.
Published: August 2011

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.
The general meaning of “extenuating circumstances” for the purposes of section 76(2)(a) of the Income Tax Act
Authors: Goldswain G.K.
Published: August 2011

The additional tax (referred to as a “penalty” by the judiciary), which may be imposed in terms of section 76(1) of the Income Tax Act (“the Act”) when a taxpayer is in default, can be very harsh (Up to 200% of the tax correctly chargeable). The Commissioner may remit any penalty imposed as he sees fit. However, when there was intent on the part of the taxpayer to evade the payment of tax, the Commissioner may not remit the 200% penalty, unless he is of the opinion that there are “extenuating circumstances”. This article examines the general meaning, as interpreted by the courts, of the “extenuating circumstances” that may be taken into account for the purposes of remission of penalties in terms of section 76(2)(a) of the Act.
Reliance on professional and non‐professional advisors or staff as a defence to the imposition of penalties in income tax matters
Authors: Goldswain G.K.
Published: August 2011

Many taxpayers rely on their advisors to look after their tax affairs. In spite of this reliance, taxpayers still find themselves in default for the purposes of section 76(1) of the Income Tax Act and additional tax (referred to as a “penalty” by the judiciary) is imposed. This article examines whether the reliance by a taxpayer on his advisor, be it his accountant, bookkeeper or even a member of staff, can constitute a complete or partial defence to the imposition of additional tax in terms of section 76(1) or be regarded as an “extenuating circumstance” for the purposes of remission of additional tax in terms of section 76(2)(a).
The influence of full compliance with the Companies Act on the knowledge‐creating potential of the directors’ report
Authors: Gouws D.G. , Cronjé C.J.
Published: August 2011

Accounting is a complex system, comprising numerous items and transactions that are interrelated in various ways. Management’s decisions are reflected in accounting information. The user of accounting information has a real need to comprehend such information in order to make informed decisions. The research reported in this article reveals that when the directors’ report fully complies with the letter and context of the Companies Act, it should be used as: a communication tool to enhance comprehensibility; as a mechanism to explain the economic reality of the company; and as a vehicle to reduce the gap between accounting information and the user. It should therefore be used as a knowledge‐creating statement, which the various stakeholders of the company can tap into.
The use of grounded theory in accounting research
Authors: Kirk N. , van Staden C.
Published: August 2011

In this paper, grounded theory is investigated and applied to research on electronic commerce in order to demonstrate its use and potential limitations in accounting research. Grounded theory enables relevant theoretical concepts to emerge from the data and, in this way, leads to discovery. In treating ‘all as data’, grounded theory uses a pragmatic approach, combining qualitative and quantitative data and datagathering methods to encourage a rich understanding of the situation. This enables the generation of theory rather than the confirmation of existing theory. To illustrate this process, this paper demonstrates the emergence, with the use of grounded theory, of a definition for electronic commerce.
The informativeness of voluntary disclosure in the annual reports of listed industrial companies in South Africa
Authors: Myburgh J.E.
Published: August 2011

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.
Equity index futures contracts and share price volatility: A South African perspective
Authors: Nel I. , de K Kruger W.
Published: August 2011

The purpose of this research is to determine whether the trading of equity index futures contracts on the South African Futures Exchange (SAFEX) results in an increase in the volatility of the underlying spot indices. Since equity index futures contracts were first listed in the USA in 1975, various studies have been undertaken to determine whether the volatility of shares in the underlying indices increases as a result of the trading of such futures contracts. These studies have lead to the development of two schools of thought: [a] Trading activity in equity index futures contracts leads to an increase in the volatility of index shares. [b] Trading activity in equity index futures contracts does not lead to an increase in the volatility of the index shares and could in fact lead to greater stability in equity markets. Although some evidence of higher volatility in expiration periods was found, volatility in the expiration periods was not consistently higher than in the corresponding pre‐expiration period.
Constitutionality and the Income Tax Act
Authors: van Schalkwy L.
Published: August 2011

Years ago, the Katz Commission questioned the constitutionality of certain provisions of the Income Tax Act, 1962. The purpose of this article is to investigate the general principles of human rights litigation and the progress made to date in respect of rectifying the unconstitutional provisions of the Income Tax Act that were identified by the Katz Commission. It has been established that, although some unconstitutional provisions have been amended, others still prevail, and that, in the light of the factors identified, they will probably not be challenged successfully by taxpayers.
Postgraduate education in taxation by means of a flexible learning model: A new educational paradigm
Authors: Wolmarans H.P.
Published: August 2011

The Internet is becoming increasingly important in our daily lives. So, too, is the ease of communication by means of television. The power of these two technological tools in education has been combined in so‐called ‘flexible learning’. This study investigates the experience of students in a master’s degree programme in taxation, which is presented by means of flexible learning. In general, students experience this mode of learning very positively and would advise others to enrol for the same course. They acknowledge that the benefits of flexible learning far exceed any possible drawbacks.
Investment management education: Is there a gap between the perceptions of academics and of practitioners?
Authors: Wolmarans H.P.
Published: August 2011

In recent years, investment management education has become increasingly relevant. As a result of this development, it is essential that various role players should be consulted to ensure that investment management is taught in line with practitioners’ requirements. The South African Qualifications Authority also specifies that educators and practitioners should collaborate to maintain relevance in all fields of education. The importance of various areas in investment management was investigated. This article compares the ranking of these areas in terms of their importance as perceived by academics and practitioners. The study being reported also aimed to determine whether gaps exist between the areas that academics regard to be important and the areas that practitioners regard as such. Areas that are generally regarded to be most important include asset allocation, fundamental analysis and the measurement of risk and return. Areas that are regarded to be least important include arts, antiques and other hard assets; rights and capitalisation issues; and real estate. Areas in need of research include the measurement of risk and return; asset allocation; derivatives; and global markets and instruments. The findings of this study could have a significant impact on the provision of relevant training for South African investment specialists.
The SA mining industry enters the HIV/AIDS war zone
Authors: Davies J.R. , de Bruin D. , Deysel M. , Strydom M.
Published: August 2011

The mining sector represents a significant portion of the South African economy. The recent announcement of the proposed black empowerment bill for the mining sector caused share prices to plummet. This reaction, in turn, caused a marked devaluation of the rand against other major currencies. Anything that impacts negatively on the mining sector will therefore have an adverse effect on the South African economy. This paper considers the affect that HIV/AIDS will have on the mining sector and, by implication, on the South African economy. Consideration is given to whether mining companies manage this risk properly and whether it is reasonably accounted for and disclosed in the financial statements. Conclusions are drawn and recommendations made regarding HIV/AIDS risk management and how HIV/AIDS issues can be disclosed fairly. Although the management teams of mining companies have introduced a HIV/AIDS risk‐management process and have commenced the disclosure of HIV/AIDS information, the disclosure is still far from adequate.
The effect of attribution on perceptions of managers’ performance
Authors: de Villiers C.J.
Published: August 2011

Managers can influence the evaluation of their performance by advancing various reasons for or making attributions regarding their financial achievement or the financial achievement of their divisions. In this study, an experimental design is used to determine the effect that the advancing of controllable reasons versus uncontrollable reasons, of which evaluators are either aware or not aware, has on the evaluation of managers’ performance in conditions in which they had recorded financial results that are lower or higher than the budgeted figures. The experiment reveals that performance evaluations are higher when variances are explained by means of controllable reasons in the abovebudget setting, whereas higher evaluations result in the below‐budget setting when variances are explained by means of uncontrollable reasons. Furthermore, the evaluator’s prior knowledge of these reasons results in a difference in the performance evaluation rating. Specifically, known reasons result in higher manager evaluation ratings. The experiment reveals that managers that record above‐budget performance are given higher evaluation ratings than managers that record below‐budget performance, even when variances are explained by means of reasons that the managers cannot control. This is known as the outcome effect. However, the findings indicate that the outcome effect is smaller when the evaluator has independent knowledge of the reason(s) advanced.
The conduct of the taxpayer ‐ Can the conduct of the taxpayer affect the level of the penalty or sanction imposed in income tax matters?
Authors: Goldswain G.K.
Published: August 2011

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).
A survey of current online reporting practices in South Africa
Authors: Venter J.M.P.
Published: August 2011

The aim of the study being reported, was to determine the status of online reporting in South Africa. The history, advantages and disadvantages of web‐based reporting were evaluated. A survey was undertaken among the top South African listed companies to determine the extent of their use of technology for online financial reporting and investor relations. The results of the survey indicate that the use of the internet by top South African companies has increased tremendously over the past number of years. The increased importance of online reporting is demonstrated by the fact that several companies not only provide copies of their annual financial statements on their website, but have also progressed to the second and the third stage of online reporting. Communication with investors, which is a part of online reporting, is very important. The results of the survey indicate that companies take this matter into account when preparing a home page on their website. From a comparison of some of the results of this survey with those of international surveys it can be concluded that South African companies are keeping abreast of international trends regarding the use of the Internet as a medium of communication with investors and shareholders.
Reviewing the internal auditing function: Processes and procedures
Authors: Venter J.M.P. , du Bruyn R.
Published: August 2011

Internal auditing assumes an increased responsibility for the evaluation of entity operations as a service to management and the board of directors. Quality assurance review is the process through which assurance is obtained that the internal auditing department’s work is done in accordance with the Standards for the Professional Practice of Internal Auditing. This study examines the current practices of quality assurance review in South Africa. Although not all organisations surveyed do perform internal auditing quality assurance reviews, the organisations that do, benefit from them. Various methods are used in practice to perform internal and external quality assurance reviews. This study provides information on the processes and procedures used in quality assurance review programmes.
The court decision in the case of Woulidge ‐ A practical application
Authors: West C. , Surtees P.
Published: August 2011

This article comprises an attempt to find a practical method of applying the decision in the case of the Commissioner for the South African Revenue Service v Woulidge (63 SATC 483) (‘Woulidge’) to limit the application of section 7(3) of the Income Tax Act (‘the Act’). It is proposed in this article that Woulidge would also apply to the provisions of section 7(5) and paragraphs 69 and 70 of the Eighth Schedule to the Act. The approach proposed is illustrated by means of examples. The approach adopted by the Commissioner for the South African Revenue Service is also discussed. A conclusion is drawn regarding the practicality of applying Woulidge in the light of the examples.
Treating the credit difference that arises from an acquisition as negative goodwill
Authors: Wiese A.
Published: August 2011

The treatment of the credit difference that arises from an acquisition took a step in a new direction in South Africa with the adoption of a new accounting standard, namely AC 131, which is based on the international standard IAS 22. It is now called negative goodwill. According to the rules contained in AC 131, it is to be classified as a negative asset and recognised as income. The research on which this paper is based, was undertaken to examine the nature of negative goodwill against the background of the international accounting practices regarding the treatment of negative goodwill. At present these practices differ significantly and the differences represent obstacles to international harmonisation. The paper critically evaluates the various treatments and recommends a preferred accounting treatment.
The concept of ‘disposal’ for the purposes of capital gains tax in South Africa
Authors: Wilcocks J.S. , Strydom J.J.
Published: August 2011

Liability for capital gains tax is determined in terms of the Eighth Schedule to the Income Tax Act 58 of 1962. According to the Eighth Schedule, the disposal of an asset is the event that triggers the liability for capital gains tax. It is therefore imperative to know what constitutes a disposal, because it is fundamental to the entire capital gains tax regime. The purpose of this paper is to analyse the definition of a disposal in order to ascertain whether a disposal, as defined, is intended to mean a transfer of ownership in an asset or whether a disposal could take place upon the occurrence of events or causae other than the transfer of ownership. A study of relevant literature was undertaken to analyse the definition of “disposal” in order to fully comprehend the intention and meaning of the term as it is contemplated in the Eighth Schedule. The current definition of a “disposal” could lead to uncertainty and anomalies. It is therefore recommended that the legislature should amend the definition of a disposal in the Eighth Schedule. The definition should refer to the disposal of an asset (other than a personal‐use asset) as being the transfer of ownership of an asset from one person to another or the loss of the ownership of an asset. Because the common law has clear principles regarding how ownership of different classes of assets is transferred, no confusion would arise regarding whether or when a disposal has occurred.
Trends in South African corporate environmental reporting: A research note
Authors: Antonites E. , de Villiers C.J.
Published: August 2011

The contents of the annual reports of listed mining companies as well as of the Top 100 industrial companies in South Africa were analysed to determine how the disclosure of environmental information has changed over time. Disclosure of general environmental information increased until 1999 and then stabilised at that level. The initial increase in the disclosure of specific environmental information, such as measurable objectives and environmental performance, was followed by a decrease from 1998 onwards. A possible explanation could be that the lack of legal requirements with regard to the reporting of environmental information enables companies to decide what to report and what the extent of the reporting should be. They can therefore elect not to report specific and sometimes sensitive information, because stakeholders could perceive such information to be negative and it could therefore have a negative impact on the corporate image.
Why do South African companies not report more environmental information when managers are so positive about this kind of reporting?
Authors: de Villiers C.J.
Published: August 2011

Previous research has highlighted a contradiction in regard to environmental reporting in South Africa. Managers, who can influence decisions regarding disclosure, express the view that more environmental reporting is needed, yet very little such reporting is done.
A questionnaire was sent to every company listed on the Johannesburg Stock Exchange (JSE) with the request that the financial director should complete it. The questionnaire set out to establish whether managers are still as positive about environmental reporting as reported in previous research findings and, furthermore, to determine the reasons for the dearth of environmental reporting. Managers are still as positive as before about environmental reporting. The reasons for not reporting range from the contention that data is not available, that there are no legal requirements and that there is no demand for the data to the contention that it is not applicable to the particular industry and that costs exceed benefits. Most respondents do not regard the fear of liability to be a very important reason for non‐disclosure. The most important reason for non‐disclosure is that there is no legal requirement in respect of disclosure. This reason, together with the positive attitude of directors towards environmental reporting in general and towards reporting on a compulsory basis in particular, makes a strong case for the introduction of legislation in this regard. The introduction of legislation could be achieved by amending the Fourth Schedule of the Companies’ Act or the introduction by The South African Institute of Chartered Accountants (SAICA) of a statement of Generally Accepted Accounting Practice (GAAP) on environmental disclosure.
Testing the relationship between intellectual capital and a company’s performance: Evidence from South Africa
Authors: Firer S. , Stainbank L.
Published: August 2011

The aim of this study was to investigate whether the performance of a company’s intellectual capital can explain organisational performance. The dimensions of a company’s performance are (1) profitability, (2) productivity and (3) market valuation. Data were obtained from a sample of 65 companies that are listed on the JSE Securities Exchange (high knowledge‐base sectors). Findings from the empirical analysis indicate that the relationships between the performance of a company’s intellectual capital and (1) profitability, (2) productivity and (3) market valuation are informative but varied. The empirical findings suggest that the performance of a company’s intellectual capital can explain profitability and productivity, but not market valuation.
Special or unusual defences or “extenuating circumstances” that may be pleaded for the purposes of remission of penalties in income tax matters
Authors: Goldswain G.K.
Published: August 2011

The general meaning of “extenuating circumstances” for the purposes of section 76(2)(a) of the Income Tax Act, No. 58 of 1962, (the “Act”), was discussed by the current author in a previous article in this research journal. Certain defences or pleas and their effect on the level of penalties imposed by the judiciary were also analysed in previous articles in this research journal. These defences and pleas include reliance on a tax advisor, bookkeeper, accountant or member of staff and the conduct of the taxpayer before, during and after committing an offence. This article specifically examines those special or unusual defences or “extenuating circumstances” that may influence the level of a penalty that is imposed in terms of section 76 of the Act for offences that are committed in terms of that section.
The personal circumstances of the taxpayer as a defence or as a plea of “extenuating circumstances” for the purposes of remission of penalties in income tax matters
Authors: Goldswain G.K.
Published: August 2011

Heavy penalties may be imposed on a defaulting taxpayer in terms of section 76(1) of the Income Tax Act, 58 of 1962 (the “Act”), unless “extenuating circumstances” are found to prevail, in which case any penalty imposed may be remitted partly or even in toto. This article examines the defence or plea of adverse personal circumstances, such as education, intelligence, financial means, hardship, age, influence of others, provocation and the death, insolvency or liquidation of a taxpayer, and whether such adverse personal circumstances could be considered to be “extenuating” for the purposes of section 76(2)(a) of the Act and lead to a remission of the penalties imposed.
Beleggersverhoudinge op die internet: ’n Ondersoek in Suid‐Afrika
Authors: Loxton L.
Published: August 2011

This study investigated the investor relations activities on the Internet of companies that are listed on the Johannesburg Securities Exchange (JSE). For this purpose, the home pages of the JSE Top 40 companies were searched and screened for investor relations items. A three‐stage model was used. The results of the study indicate that companies use more advanced features of the Internet for investor relations in comparison with previous studies undertaken in other countries. Most companies in SA appear to be in the second stage of Internet investor relations. The leading companies in SA are ready to enter the third stage of Internet investor relations.
Contemporary management accounting for the sustainable competitiveness of the South African motor manufacturing industry
Authors: Pretorius I.M. , Visser S.S. , Bibbey F.J.
Published: August 2011

Since the implementation of the Motor Industry Development Programme in 1995, South African motor manufacturers have had to face pressures and challenges to which they had not been accustomed in a very protected environment. These pressures include ever‐intensifying competition, which necessitates increased competitiveness with regard to quality and price. As locally built cars can compete with the best in terms of quality, the primary area of concern for survival has shifted to international competitiveness with regard to price. This research project comprised a literature study and an empirical survey of the developments in the management accounting used by the seven major local motor manufacturers, which together have a 90,8% share of the local market. Conclusions are drawn and recommendations made regarding the implementation and improvement of the contemporary management accounting techniques that are used in the South African motor manufacturing industry. The aim of the project was to contribute towards target pricing, which could result in the increased profitability and competitiveness of the local industry in a highly competitive global market and at a market‐based price.
Ethics beyond the code of conduct ‐ understanding the ethical dilemmas of entrepreneurs
Authors: Robinson D. , van der Mescht H. , Lancaster J.
Published: August 2011

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.
Views of black trainee accountants in South Africa on matters related to a career as a chartered accountant
Authors: Sadler E. , Erasmus B.J.
Published: August 2011

Against a backdrop of only 337 black chartered accountants in a total of approximately 20 000 in South Africa in 2003, the South African Institute of Chartered Accountants (SAICA) is reviewing its current transformation targets for 2005. Information was required to review the obstacles that black trainees 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 barriers in respect of career guidance; funding and bursaries; role models in the profession; knowledge of the profession; and exposure to business. The questionnaire was distributed to all 755 black trainee accountants that were registered 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 careers 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; racial bias on the part of supervisors; and a lack of recognition of and respect for the work completed. 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 professional black mentors in the business sector should be formed; and the advancement and retention of black members within the profession should be encouraged. Awareness programmes should be accorded a high priority in the short term.
Cash flow reporting: Do listed companies comply with AC 118?
Authors: Steyn B.W. , Hamman W.D.
Published: August 2011

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.
The source of a debt defeasance receipt
Authors: Stiglingh M. , Biemans M.M.A.
Published: August 2011

A debt defeasance arrangement is an arrangement whereby a debtor’s obligation to pay a creditor is nullified. The debtor and other parties perform a variety of legal and other actions in order to effect a valid debt defeasance arrangement. One of the actions that should be taken by the debtor is to pay an amount to a third party who takes over the obligation to pay the debt. The money received by the third party is referred to as a debt defeasance receipt. Debt defeasance arrangements are used in countries such as the United States of America and Australia. The financial community in South Africa is becoming increasingly interested in the debt defeasance arrangement. As South Africa is becoming part of the global community, more foreign companies are doing business in South Africa. Because it is a relatively unfamiliar arrangement, that has not yet been addressed by the South African taxation authorities, there are probably a number of unanswered tax questions regarding the arrangement. One issue that is not yet clear is what the source of a debt defeasance receipt would be if it were to be received by a non‐resident in South Africa. A survey was done among South African banks, auditing firms and taxation senior counsel to determine the majority opinion of South African respondents regarding the source of a debt defeasance receipt. Although a variety of alternatives are identified as possible sources, the majority view is that the source is the debt defeasance business activities that are conducted by the recipient. It therefore follows that if the recipient of a debt defeasance receipt conducted his or her debt defeasance business activities in South Africa, the receipt will be of a South African source.
Does Lintner’s dividend model explain South African dividend payments?
Authors: Wolmarans H.P.
Published: August 2011

It is generally accepted that the payment of dividends is the most important and most widely used instrument for the distribution of value to shareholders. Shareholders also prefer to receive regular dividends rather than irregular cash payments. A well‐known model that attempts to explain dividend policy is that of Lintner (1956). This study investigates whether Lintner’s model can be used to explain South African dividend payments and compares this model with another, less sophisticated, model, namely the “percentage model”. Lintner’s model does not have a very good fit, probably as a result of the small sample used. Nearly half of the 200 largest companies that are listed on the Johannesburg Securities Exchange were excluded from the study as they were not listed for a sufficiently long period. Other companies were excluded on the grounds of having maintained their dividends on the same level for at least two consecutive years.
Financial reporting on the internet in South Africa
Authors: Barac K.
Published: August 2011

The inherent nature of the Internet affects financial reporting in the sense that information on a website is available to anyone, anywhere and at any time. Financial reporting on the Internet reduces the cost of financial reporting, makes instantaneous reporting a reality, adds breadth and depth to business reporting, allows analytical tools to be used on underlying business data and makes it easier to disseminate reports to any place in the world where there is a computer. A cursory exploration of financial reporting on the websites of South African companies reveals great variations in terms of the amount of content (e.g. summary financial statements vs detailed financial statements), the style of presentation (e.g. similar to paper‐based reports vs inclusion of multi‐media) and the manner in which companies incorporate navigation aids (e.g. hyperlinks, search boxes and others). The advantages of the Internet as a new mode of information dissemination are clear, but Internet financial reporting creates a number of challenges for companies and their auditors as well as for regulatory and standard‐setting organisations. This paper assesses Internet reporting in South Africa. It explores the manner in which financial and certain non‐financial information is presented on companies’ websites and determine whether reporting practices on the websites of South African companies differ fromthose of their international counterparts. The study revealed that although Internet usage in South Africa has expanded as a medium for presentation of financial information via companies’ websites, top South African companies use their websites as a bulletin board with limited real‐time financial information and note disclaimers.
Ethical arguments regarding corporate environmental reporting
Authors: de Villiers C.J.
Published: August 2011

The environment is an important business issue and it will be even more so in future. Environmental reporting nowadays features increasingly in annual reports and elsewhere. It is however not compulsory and corporate decision makers must therefore make a decision for or against such reporting. Ethics is at stake in any decision involving right or wrong. Ethical theory is therefore examined in an effort to establish whether environmental reporting should be done. It is concluded that corporate environmental reporting constitutes the ethical high road.
The relationship between EVA, MVA and leverage
Authors: de Wet J.H. , Hall J.H.
Published: August 2011

It is generally believed that in order to maximise value for shareholders, companies should strive towards maximising MVA (and not necessarily their total market value). The best way to do so is to maximise the EVA, which reflects an organisation’s ability to earn returns above the cost of capital. The leverage available to companies that incur fixed costs and use borrowed capital with a fixed interest charge has been known and quantified by financial managers for some time. The popularisation of EVA and MVA has opened up new possibilities for investigating the leverage effect of fixed costs (operational leverage) and interest (financial leverage) in conjunction with EVA and MVA, and for determining what effect changes in sales would have through leverage, not only on profits, but also on EVA and MVA. Combining a variable costing approach with leverage analysis and value analysis opens up new opportunities to investigate the effect of certain decisions on the MVA and the share price of a company. A spreadsheet model is used to illustrate how financial managers can use the leverage effects of fixed costs and the (fixed) cost of capital to maximise profits and also to determine what impact changes in any variable like sales or costs will have on the wealth of shareholders.
Financial accounting and reporting: Sustaining relevance in the present time paradigm
Authors: Gouws D.G. , Rehwinkel A.
Published: August 2011

Accountants are looking for innovative solutions to challenges and problems that seem to become increasingly numerous and complicated. Researchers debate whether the emergence of these challenges is due to a general dissatisfaction with the existing accounting paradigm. This article therefore presents a transdisciplinary approach aimed at creating a new accounting paradigm. The discipline of accounting is challenged by blending the limitations within the present paradigm with the discoveries in physics and quantum mechanics. This study shifts the attention to those aspects of reality that characterise today’s accelerated social change, disorder, instability, diversity, disequilibrium and non‐linear relationships – all with a heightened sensitivity to the flow of time. By interpreting financial accounting and reporting from this perspective, new perspectives are offered from a holistic paradigm of transcendence in relation to the arrow of time and information capacity.