Home Accounting and Auditing Draft black empowerment code for CAs gazetted (and what’s wrong with it)

Draft black empowerment code for CAs gazetted (and what’s wrong with it)

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Comment from Nicolaas van Wyk, CEO of SA Institute of Business Accountants: “We (Saiba) oppose this charter as it benefits the dominant player in the sector (Saica). There is no other sector that has a charter that benefits a privately controlled entity.

“There are supposed to be sector charters for mining, banking and other sectors, but there is no charter for De Beers or Absa – which are private sector companies.

“So we will be objecting to this “charter” on the basis of anti-competitiveness and the fact that it is not in line with the BBBEE principles of broad empowerment. We will ask that that it be replaced with a Accountancy Profession Charter.

“If it’s allowed to continue in its current form then it will force universities and employers to fund the development of a privately controlled entity to the detriment of the accounting community as a whole.

“Saica enjoys special privileges that as a result of legislation like this dominates the sector. Their actions are not in the public interest and given recent involvement of CAs in corporate scandals, this leaves a very bad taste in the mouth.”

Saiba members are encouraged to comment on this draft charter and if you share Nicolaas van Wyk’s views on the anti-competitiveness of this new development, write to cacode@thedti.gov.za.

What’s in the new code for the CA profession?

From Saica:  In its quest to empower and grow the number of Black people in the chartered accountancy profession and empower them meaningfully to participate and sustain the growth of the economy, the Department of Trade and Industry, has gazetted the revised Chartered Accountancy Profession Sector Code (CA Charter) for public comment. According to transformation commentators, the CA Charter will significantly increase the pace of transformation in the sector.  

The Chair of the CA Charter Council and Executive Chairperson of the African Women Chartered Accountants (AWCA) Investment Holding Company, Sindi Mabaso-Koyana, explains the key objectives of the revised code: ‘One of the CA Charter’s primary goals is to strengthen the country’s economy by playing a significant and leading role in transformation and skills development by looking deep into the chartered accountancy profession in a united manner. Our profession has faced many challenges over the past few years. Now that the CA Charter has finally being gazetted, not only can the profession ramp up the transformation efforts it began so many years ago but it can elevate these plans to restore the nobility of the profession while executing tangible results.’

While the CA Charter utilises the Generic Codes as a base for its charter as far possible, it deviates from the standard allocation of points required under B-BBEE legislation in order to place a significant emphasis on the skills development that forms the foundation of the sector. In so doing, the CA sector seeks to achieve its stated objective of growing the number of Black people in the CA profession to reflect the country’s population demographics.

These deviations are particularly evident in:

  • the increased weightings of targets set for the Skills Development Element, where ten additional points have been added to the weighting; and
  • the Enterprise and Supplier Development Element, where ten points have been removed from the procurement targets: it has minimal applicability in the CA sector.

The weightings for the revised CA sector codes are therefore as follows:

ElementCodes of Good PracticeCA Sector Code
Ownership25 points25 points
Management Control19 points19 points
Skills Development20 points30 points
Enterprise and Supplier Development40 points30 points
Socio-Economic Development5 points5 points
Total109 points109 points

The CA Charter: significantly more than a mere tick box exercise

Having examined the practical implications of the B-BBEE codes, the Council has worked in consultation with various key stakeholders to devise creative and sustainable ways to use the Generic Codes to cultivate growth and equality within the sector and thereby produce more Black CAs(SA).

By changing the Skills Development Score to 30 points, from the conventional 20, the CA profession is able to place greater emphasis on training, learnerships and bursary fund investments as it is impossible to grow the number of Black CAs(SA) without funding.

In addition to removing ten points from the Enterprise and Supplier Development Element (reducing it to a total of 30 points as opposed to 40), the CA Charter has reduced Supplier Development contributions from 10 points to five points and allocated these five points to the capacitating of South Africa’s historically disadvantaged tertiary institutions (HDIs) so they can develop future Black CAs.

‘There is wisdom in building capacity at HDIs,’ explains Mabaso-Koyana, ‘as improving the level of education available at HDIs means that we increase the capacity of the country in increasing the number of Black students who can now graduate from these institutions and also address many challenges relative to inequality.’

She adds that the contributions towards this factor will also be used for, among other things, the subvention of salaries for Black academics at these institutions.

Why a Sector Code specifically for the CA profession?

‘The unique nature of CA profession demands strategic development approaches,’ comments Chantyl Mulder, SAICA Executive Director: Nation Building. ‘The number of prospective Black CAs(SA) in the pipeline — relative to those who are well established —is growing thanks to ongoing transformation initiatives such as SAICA’s Thuthuka Bursary Fund.’ 

Yet, she comments, ‘South Africa still has a large shortage of CAs(SA) – especially African and coloured CAs(SA). But thanks to the CA Charter, the profession now has a very real opportunity to empower South African citizens by meaningfully expanding the economic activity of the country through the creation of decent work and sustainable livelihoods.’

Individuals who want to comment on the new CA Charter, should e-mail the DTI (for the attention of Sipho Solfafa) at cacode@thedti.gov.za by no later than 26 June 2019.

The full CA Charter can found at www.cacharter.co.za.