The body responsible for issuing accounting standards in South Africa are hosting their inaugural conference in Sandton.
This comes in the wake of the shock announcement that South Africa lost its number one ranking for the quality of our auditing and reporting standards. According to the latest Work Economic Forum (WEF) competitiveness report South Africa now rank 30th out of 137 countries. A very negative view on the strength of financial auditing and reporting standards in South Africa.
The conference comes at a critical time within the profession given the admission by big four auditing firm, KPMG, of a serous lapse in applying required auditing and accounting standards.
The conference is a first step to increase the prominence of the Financial Reporting Standards Council (FRSC) in South Africa’s economic debate and create awareness of the work being done.
A creature of statute by way of the Companies Act, 2008 the FRSC recommends to the Department of Trade and Industry (DTI) how and when to adopt international standards for use by South African companies.
Unlike their UK counterpart the South African FRSC does not have punitive power to enforce compliance and are not empowered to regulate the accounting profession. However as an advisory body their role is still crucial in improving the quality of the financial information reflected in the financial statements of South African companies.
According to the chairperson of the FRSC, Dr. Suresh Kana, the FRSC monitors the work of the international standard setter, the IASB, and contribute to the development of international standards by commenting on exposure drafts.
The inaugural conference focussed on providing update on the most recent and influential standards to be issued including Financial Instruments, Revenue, Leases, Insurance Contracts. Other issued discussed and shared relate to:
- Reduced disclosure framework to reduce cost of producing financial statements.
- Changing corporate reporting to provide more holistic information.
- Impact of artificial intelligence and big data mining on development of standards and the quality of financial information.
- Amendments to the format and content of financial statements to enhance performance reporting.
- Providing a framework for summary financial statements.
- AC 500 series previously issued by SAICA to be reviewed and approved for issue.
- Communication with important stakeholders including JSE, SAIBA, SAICA, IRBA, PAFA, and BRICS.