Author: Ewald Müller
Saica’s Ewald Müller tells us why SA wins with its chartered accountants.
JOHANNESBURG – A career in chartered accountancy certainly isn’t for everyone. It generally takes at least four years of academic study at South Africa’s top universities and another three years of practical training, simultaneous study and passing not one but two of the toughest professional exams in any business, anywhere. But to be the best in the world takes that sort of sacrifice, discipline and yes, talent.
In his July 19 polemic entitled “Why CA’s are bad for SA” about the chartered accountancy profession,Moneyweb columnist Shawn Hagedorn rightly noted that “accounting is closely tied to finance and finance to economics”. Here it is fair to note that the standards of South African chartered accountancy played a critical role in helping protect our banking and financial system from the world’s worst financial crisis since the Great Depression. We, as a collective and we stand together with our regulators here, DID NOT allow speculative and wildly creative valuations of derivative assets to get on to the books of our companies, or of our banks. For us the point is not to conceal risk and book phantom profits – it is to understand risk and to manage it well. This requires applying broad business principles not box-ticking accounting rules.
No South African banks failed nor did they require taxpayers to bail them out. The same can not be said of other markets such as the United States with its more adventurous valuations – often instigated by US business school graduates.
In South Africa chartered accountancy training is based on a broad competency model which requires a focus on business strategy, ethics, governance, communication and other non accountancy based disciplines which are not rules based. Of course we also insist on a deep understanding of current International financial Reporting Standards – accountancy standards which are actually principles based rather than rules based.
That the 2010/11 World Economic Forum’s (WEF) Global Competitiveness Report rated South Africa as number 1 in the World for the “Strength of its Auditing and Reporting Standards” is a tribute to the role and training of the chartered accountants of South Africa.
Chartered accountants were also among the key architects of King III – South Africa’s world class corporate governance standards. So as a profession we are proud of our contribution to the only other top spots awarded to South Africa by the WEF when it rated us number 1 for the “Regulation of securities exchanges” and number 2 for the “Efficacy of corporate boards”.
But where are these chartered accountants? Our statistics show that over 80% of chartered accountants in South Africa do not practice as auditors. About 8 000 or approximately 30% work in financial services – a major banking group alone employs about 1 500. The rest use their skills to pursue careers as business consultants, tax advisers, entrepreneurs and financial managers. Because the world has changed so has our training. Prospective CAs(SA) can now complete their training in commerce and industry or even in the public sector. We have also adapted our training requirements so candidates can elect broader areas such as financial management, taxation or auditing as part of their practical workplace experience. Candidates can now complete part 2 of their final qualification examination on either financial management or audit.
Eight months ago we researched the top 194 companies on the JSE by market capitalisation. It was no surprise to find that 32% of chief executives were chartered accountants as were 75% of the chief financial officers. In fact 32% of all directorships of the top 194 companies are held by chartered accountants. Company boards select so many CAs(SA) because they show business leadership, strategic nous, logical and analytical rigour and because they are trusted. Chartered accountants must comply with the highest standards of professional ethics – and the market recognises them with often highly rewarded career options.
Readers will note that these chartered accountants are not only found in auditing partnerships, but are leading the huge dynamic companies which drive the South African economy. Let’s knock on the head this myth about chartered accountants being just “auditors and boring bean counters”. Only about 4 300 or under 20% of our members are engaged purely in auditing. And yes they are extraordinarily good at understanding and applying the principles of the devilishly complicated International Financial Reporting Standards as well as International Audit Standards. Shareholders, regulators, investors and the person in the street should take comfort from the fact that their auditors know the principles and stick to them – it is after all your investment money. You would want the same standard from your tax adviser. To keep it this way SAICA insists its members keep up-to-date with a minimum of 40 hours of professional development each year – not necessarily in accounting, auditing and tax.
For those who still think being a chartered accountant limits your thinking or your career options consider for a moment that many of South Africa’s most dynamic and creative entrepreneurs are CAs(SA). Have a look at what Brian Joffe has created with Bidvest or Stephen Koseff at Investec – these are extraordinary entrepreneurs. And don’t forget the public sector. It’s not a coincidence that the most highly rated departments of state the Auditor General, the South African Revenue Service (SARS) and the National Treasury offer careers for gifted CAs(SA) – in fact they are accredited training offices.
Top students aspire to become CAs(SA) because it gives them an excellent opportunity to have a successful, sustainable career in almost any industry. This is because over many decades South Africa’s chartered accountants have earned a reputation as exceptionally professional, dynamic and as achievers in whatever they do.
At SAICA we design our curriculum to prepare chartered accountants to be leaders in business and leaders in the community. That is why many of the top companies prefer employing CAs(SA). It is our belief that the world (over 6 000 of our members work internationally) and South Africa recognises the quality and integrity of its CA(SA) designation. And that is why many talented students are convinced to pursue a career as a chartered accountant.
*Ewald Müller, is senior executive standards at the South African Institute of Chartered Accountants (SAICA).