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06 Oct 2014ACCOUNTING: Fostering Reciprocal African Accounting Links and Boosting African Business
Recent Gauteng Business News
The foundation of the Pan African Federation of Accountants (PAFA) in 2011, while primarily to accelerate the growth of the accounting profession in Africa and act as a voice for the profession in strategic decision-making, also recognised the importance of the profession to business expansion overall. With sub-Saharan African economic growth outstripping most other regions – and some countries experiencing annual growth rates of seven per cent or more – both the big-business and SME sectors will fuel growing demand for auditing, integrated reporting, and other professional financial services provided by the profession.
PAFA also recognises that accountants play a role in business growth over and above accounting. “Research has shown a direct correlation between the percentage of business graduates in a population and the growth of developing countries’ GDPs,” says Vickson Ncube, CEO of PAFA, “and 35 per cent of all the companies listed on the JSE have accountants as CEOs.” The South African Institute of Chartered Accountants (SAICA) reports that fewer than 20 per cent of its members work in auditing, whether in the “Big Four” firms or small and medium practices. The vast majority of SAICA’s members are “members in business’; either filling executive and financial roles in public companies, or running their own enterprises. Accountants not only provide services to business; they often run them.
“When it comes to the various accreditation bodies, we’re brand-agnostic – the profession as a whole is our concern,” says Ncube, a Zambian-born and -trained accountant who began his career at the Zambian State Insurance Corporation. Before taking up his PAFA position, he also served the Zambian Institute of Chartered Accountants (ZICA) and the East Central and Southern African Federation of Accountants (ECSAFA). “PAFA is financed via members’ subscriptions – 39 professional accounting bodies from 34 African countries,” he continues. “We’ve also received extraordinary support – a number of big firms, like Deloitte, SNG and KPMG, have provided services free of charge, and we receive logistical, service and secretarial assistance from SAICA here in Johannesburg.”
Setting standards; shaping legislation
PAFA’s long-term vision for the continent is twofold: it aims to strengthen existing accounting institutions around Africa and in those countries with no professional bodies, to work with stakeholders to create them, and it works towards uniformity of standards in African accountancy. “Which is not to say we think the various professional bodies should abandon their individual brands,” says Ncube. “Many of these brands are powerful in their own right, and we need to harness that power – but we also need to work on making sure that all these institutions conform to an agreed international set of norms and standards. This is important for multinationals, who see the continent as an investment destination – so migration of skills must be possible. If a CA(SA) working here in South Africa decides to move to Zambia, ZICA will say, ‘No, you have to pass our exams’ – and of course it’s the same the other way round. We need to have standards that are common, to eliminate this problem.” Adopting common standards thus makes reciprocity arrangements between PAFA’s member bodies possible, allowing them to recognise each other’s qualifications and make migration easier.
PAFA is also supports the lobbying for efficient financial regulation in member countries. “We encourage our member-bodies to talk to their counterparts in the legal sector, for example, about appropriate legislation. That way, each professional body keeps its own certification criteria, but we’re all playing by the same rules,” Ncube adds. “My work with ECSAFA showed me that the needs of the Kenyan, Ugandan and South African businessman are the same. You need accountants who can add value to the business – to add strategic and planning value, not just to perform the checklist functions.”
Development and training essential
Ncube says he is an accountant “by accident” – having to choose between the woodwork or book-keeping streams at secondary school, he opted for book-keeping because mathematics has always been his strong suit. But expectations that he was going to be an engineer quickly withered. “After my first book-keeping lesson, I realised I could have a career in this,” he says. “A small thing can shape the course of a child’s life. That’s why I think initiatives such as SAICA’s two Thuthuka projects remain important – the Thuthuka Education Upliftment Fund (TEUF) encouraging core mathematics and science at school, and then the Thuthuka Bursary Fund (TBF) providing bursaries and complete social support for students taking accountancy at university.”
However, as important as education and training is to PAFA in the long-term, it also needs to maintain its immediate focus on the business at hand. “One of PAFA’s most important strategic pillars is to develop the status of the profession in the continent. With South African businesses extending their operations rapidly into Africa, this is equally important for them – and by extension, for many SAICA members. PAFA and the professional accounting bodies must stay involved in African development, in raising African issues on the international agenda, and in collaborating to ensure uniformity in auditing, ethics and business practice across the continent.”
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