The accreditation of ACCA by the Independent Regulatory Board for Auditors (IRBA) and other Stories – What does it mean?

“….and free the potential of each person.”

Preamble to the Constitution of South Africa (Act 108 of 1996)

Dumisani Mahlangu took an Audit Right Activism role advocating for ACCA to obtain IRBA’s accreditation in South Africa.

In addition to improving the quality of life, the words italicized above are found in the preamble to the Constitution of the Republic of South Africa (Act 108 of 1996). Indeed, these words affirm the promise brought to bear by the Independent Regulatory Board for Auditors (IRBA) when on Thursday 6^th July 2023 announced that it has accredited the Association of Chartered Certified Accountants (ACCA) as an additional Professional Accountancy Organisation (PAO) providing another route to Audit specialization. Colloquially this means that the ACCA now enjoys an Audit Right status in South Africa.

An endorsement of the ACCA by the IRBA confirms that the professional body has met the standards of the accreditation model (2013) when evaluated against its veracity. It further confirms that the members of this professional body who has passed certain professional examinations and following the completion of the IRBA’s Audit Development Programme will be competent to carry out duties and functions required of a Registered Auditor in South Africa. (Please click here to see the IRBA requirement to becoming an RA via ACCA qualification.)

The fight for this status has been a long standing one, progress of which dates back to the days of Public Accountants and Auditors Board (PAAB), a predecessor body of IRBA, narrative of which are well documented in the Annual Report dating as far back as 1999. ACCA has been seeking Audit Rights for 24 years – a journey that has been both arduous at best and hostile at worst.      

The 6^th of July 2023’s announcement marks a momentous occasion for the profession and what others may describe as a watershed moment.

This Audit Rights carries significant value for aspiring Professional Accountants and Registered Auditors in South Africa as it demonstrates the democratic aspirations espoused in the policy document of one of the then revolutionary movements adopted in Kliptown in 1955. Our forebears had crafted a vision for a democratic South Africa where the potential of all citizens is freed, their lives prosper, and their economic emancipation secured. 68 years on, the Independent Regulatory Board of Auditors now allows young people of South Africa to realize those ideals, and practitioners owning Accounting and Auditing firms accessing a large talent pool, thus alleviating talent shortage that firms are experiencing currently.

This accreditation promises by and large the following and I shall borrow texts from the Freedom Charter to demonstrate the potential now freed:

The people shall share in the Country’s Wealth.  

“All people shall have equal rights to trade where they choose, to manufacture, and to enter all trades, crafts and profession.”

Previously, the sole accreditation of one body promoted elitism and introduced barriers that were artificial in its design which made the profession inaccessible. This prestige enjoyed by that body was unjust and frankly unwarranted. Now barriers have been broken as more aspiring Professional Accountants can now enter the Professional Accountancy trade and craft their specialization of their choice.

Entrepreneurial amongst us by using their brains, training, competence, and drive are now afforded to manufacture hours to bill those who are prepared to utilise their services without the possibility of being a criminal agent as their firms, subject to meeting set IRBA criteria, can now be a firm of Registered Auditors.

IRBA has allowed more ambitious people to own the means of production and exploit new opportunities for career growth among accounting professionals.

The door of learning And Cultures Shall Be Opened.

“The government shall discover, develop, and encourage national talent for the enhancement of Audit Quality. (my own emphasis).

ACCA promises the buyers of accounting services that its leading qualification offers everyone everywhere the opportunity to experience a rewarding career in accountancy, finance, and management. The modality in which it delivers its promise is underpinned by the manner in which its qualification is designed. Its qualification offers a choice for aspiring professional accountants and its future members to commence their journey immediately after they have completed Grade 12 or School leaving certificate, provided that such a student has passed Mathematics and is proficient in the language of business, being English. It further provides a choice for those who want to complete an academic qualification at an Institution of Higher Learning and start at strategic professional levels.

A future ACCA member does not need an honours degree or an NQF level 8 to write any of its Strategic Professional Examination as completion of those examinations will earn a member an NQF level 8 as per the South African Qualification Authority (SAQA) levels.

The design of this qualification removes artificial barriers and does not preclude an aspiring accountant from realizing their dreams and aspirations on the account of economic austerities – as the cost to pursue an ACCA qualification is significantly minimal when compared to investment required in pursuing a full-time/part – time study programme at a traditional institution of Higher Learning.

It really gives transformation vibes.

I now turn to more serious matters brought to bear by this accreditation. In August of 2022, I penned an article where I explained why an accreditation of another professional body by IRBA matters; a summary of which is advanced in the paragraphs that follows. I might add more salient features.

Audit Quality in the advancement of Public Interest will improve:  

ACCA’s Advance Audit and Assurance (AAA) is an optional strategic paper with examinable pronouncements informed by the International Standards on Auditing (ISAs) and incorporates QUALITY MANAGEMENT AND ETHICS (ISQM Standards) and test students on CURRENT ISSUES affecting the profession.

The importance of Audit Quality is emphasized, and Audit Quality Indicators are interrogated in the examination of students.

Since the firms will now have resources drawn from various professional bodies who have been exposed to different way of expressing their understanding of Auditing Standards, the diversity of the Audit Team will be characterized by the plurality of views, and this will deliver Audit Product that is of higher quality. I am looking forward to perusing IRBA’s inspection reports in this regard.

Transformation and access to the profession:

This accreditation transforms the profession in the most profound of ways. The seismic shift accorded hereto paints a picture where opportunities for those from designated groups can attain an international qualification that is respected globally and can with it enter the Audit profession. What is equally encouraging is that black owned Small, Medium and Micro Enterprises have a greater talent pool from which to draw in capacitating their firms, demonstration of which will put them in good stead when tendering for Audit Work in private firms and public sector organisation, as they’ll be able to claim more points for resource capacity and ability to deliver on the assignment.

The flexibility of the ACCA qualification allows practice firm owners to plan well in advance the resourcing of their teams owing the availability of their trainees who are on the ACCA stream.

International Mobility:

ACCA is a thriving global community of 241,000 members and 542,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries and its members uphold the highest professional and ethical values. Furthermore, ACCA enjoy Audit rights in 33 countries globally, including South Africa.

As an ACCA member, this essentially means that one is exposed to opportunities in 178 countries and with reciprocal agreements is also able to work as an Auditor in these 33 countries.

ACCA members are exposed to being citizen of the globe in the true sense of the word, where this gigantic world becomes a mere village for them.

ACCA members are able to serve as panel members in their own jurisdictions (A board member role), robustness of their involvement grants them an opportunity to serve as global members of the ACCA’s International Assembly and Council, an experience which I believe grant them a passport for a flourishing career and a fulfilling role in society.

The achievement of this accreditation is personal to me. It is personal in a sense that since 2019, I have taken a lobbyist/Audit Right Activism role where I lobbied for the Audit Right status of the ACCA in RSA. This journey has been rewarding to me as I learnt valuable lessons in the process and built solid friendship and professional relationships that greatly enriched both my professional and personal life.

It was not always romantic in pursuing this goal as I was often marred by dust and sweat and blood. I strove valiantly as I harbored great enthusiasm, great devotion and spend myself in a worthy cause of ACCA’s Audit right status in the Republic of South Africa. Success is sweet in this case as I now know that this accreditation has delivered the triumph of high achievement.

I would err to ever think that I never encountered detractors in this journey as many believe that my fight for this Audit Right was tantamount to attempting to climb Mount Everest without any credible hiking gear. Little did they know that running Comrades Marathon has indeed prepared me for battles such as this because immersing oneself in the Comrades training programme reward one with utmost dedication, laser focus and a constant will to reach the finish line. I was indeed prepared to accede to defeat as well as I was aware that should I have failed; I would have done so while daring greatly.

My place in the profession shall never be with those cold and timid souls who neither know victory nor defeat. I personally know victory and have experienced its thrills!!!

This is truly a momentous occasion and glory belongs to those hardworking personnel at ACCA South Africa who have battled this Audit Right Status for the past 24 years.

IRBA’s foresight is duly noted and greatly appreciated.

This seismic shift in the profession places everyone on a level playing field. This is just the beginning for Audit Reform is multi-faceted and profession is bleeding globally. However, this accreditation facilitates the serving of public interest on a grand scale.

The words of Theodore Roosevelt kept me going for the past 5 years as an Audit Right Activist in South Africa – and please receive my retirement from that role with acceptance.

I appreciate all those who believed in this vision, and I hope those detractors are inspired and moved by these efforts.

Hope springs!

Taking care of our planet: Professional Accountants and Sustainability

As world leaders converge in Glasow, Scotland this week for COP26, the UN global Summit to address the critical and urgent issue of climate change, the role of professional accountants in participating in climate and sustainability has never been urgent than it is today.

Do Professional Accountants and the Profession have the role to play in addressing climate risks, building sustainable economies and championing climate governance?

On the 22nd of January 2019, in Davos, a young climate change activist named Greta Thunberg addressed world leaders at the World Economic Forum (WEF) and said “Some people say that we are not doing enough to fight to fight climate change. But that is not true. Because to ‘not do enough’ you have to do something. And the truth is we are basically not doing anything.” Few days later, she continued he call to action by urging these world leaders “The bigger your carbon footprint, the bigger your moral duty. The bigger your platform, the bigger your responsibility.”

Another climate change advocate, an endurance swimmer, Lewis Pugh who just two months ago swam in the Ilulissat Icefjord, Iceland has warned that “glaciers are now moving quicker than our political leaders.” Lewis has describe what is currently happening to the planet as an environmental catastrophe. He further stated that Ice is essential for life on Earth in keeping the world within liveable temperature ranges and providing a habitat for species such as polar bears and penguins.

In cannot be that it is only climate change activist like Thunberg and Pugh who are concerned about the environment – indeed companies and those who are charged with its governance are equally crucial in addressing issues of climate change and mitigating climate risks. As companies are driving value in ensuring its financial sustainability, it is important that such companies demonstrate through its actions how its economic activities interact with the environment.

The rise of ESG (Environment, Sustainability & Governance) considerations by providers of capital have shone a spotlight on companies to report on this element on its Integrated Reports as these stakeholders interest in how companies creates shareholders wealth is directly proportional to how companies report on ESG matters. Whether providers of capital punish those companies whose ESG scores is low is a matrix that is not yet well established.

Professional Accountants are increasing playing a crucial role in assisting companies in which they work to report on ESG matters in a manner that is understandable and acceptable to the users of financial statements. This essentially means that accountants are important role players in reporting economic activities of the entities in which they work, a greater responsibility as Thunberg puts it is placed on them on demonstrating how companies contribute to climate action; be it the way those companies reduce green house gas emissions to devising strategies to respond to climate risks.

However, as someone who regularly peruse Integrated Reports of various companies, what I find to be largely absent is a matter of climate governance. The credibility of climate related disclosures for those companies who elect to report on these remain unclear as whatever climate related goals such as achieving ‘net – zero’ or ‘carbon – neutral’ is difficult to measure, monitor or assure.

As it becomes evident that impact of climate change is severe and is starting to be visible, the accountancy profession has responded in addressing the effect companies have on climate action and the impact that these have on making our planet a more sustainable one.

In October of 2021, The leading professional accountancy body, The Association of Chartered Certified Accountants published a report titled “Climate Action and the Accountancy Profession: building a sustainable future” in which it addresses how accountancy and finance professionals can provide leadership and expertise in the drive to decarbonise organisations.

This report reveals that for the profession to meet the challenges brought about by climate change, organisations need to put accountancy and finance professionals at the heart of climate action strategy and implementation. The report further states that these organisations should start by focusing on integrating finance and sustainability expertise in the following areas:

Business strategy: The future success for all organisations will be shaped by how they adapt their business to meet the challenge of
climate change. This means climate and nature-related
considerations must be central to organisations’ overall
business strategy.

Governance: the tone set by organisation leaders plays an important
role in influencing climate action. The impact of climate risks should be on the agenda of board meetings.

Journey towards decarbonisation: Organisations cannot reduce what cannot be measured. Organisations of all sizes will have to reduce their greenhouse gas (GHG) emissions over the next few decades to meet climate change targets set by governments. This will involve measuring, accounting for and reducing emissions generated by the organisation, its suppliers – and, ultimately, the consumers who use its products.

Science based targets to guide decision making: adhere to science based targets in developing KPIs that can guide organisations towards
decarbonisation successfully.

Accounting frameworks and standards: Accountancy and Professional Accountants within organisations must play a central role in helping to
integrate climate and other environmental and social value into traditional reporting – as well as identifying and providing analysis on the interdependencies of climate related risks.

To demonstrate the importance of the profession in addressing climate challenges, the report suggested that the profession must place climate risk, environmental, social and governance (ESG) and net – zero at the heart of organisational strategy as one of the steps that can be taken today to accelerate achieve climate related targets.

To enable organisations to account for their real value to society, global initiatives that aims to enhance climate and broader sustainability-related
reporting has been established through standards set by a new International Sustainability Standards Board (ISSB). To this extent, on the 3rd of November 2021, the IFRS Foundation announced three significant developments to provide the global financial markets with high – quality disclosures on climate and other sustainability issues. Such announcements were:

1. The formation of a new International Sustainability Standard Board (ISSB). The objective of these standard setter will be to develop a comprehensive global baseline of high – quality sustainability disclosure standards to meet investors’ information needs.
2. The leading investor focused sustainability disclosure organisations, namely Climate Disclosure Standard Board (CDSB) and Value Reporting Foundation (The home for Integrated Reporting Framework) will be integrated into the new board by June of 2022.
3. The publication of the prototype climate and general disclosure requirements. This prototype was developed by the Technical Readiness Working Group (TRWG) of the IFRS Foundation

In welcoming the announcement, The Chair of the IFRS Foundation Trustee said that “Sustainability and particularly climate change, is the defining issue of our time. To properly assess related opportunities and risks, investors require high – quality, transparent and globally comparable sustainability disclosures that are compatible with the financial statements. Establishing the ISSB and building on the innovation and expertise of the CDSB, the Value Reporting Foundation and others will provide the foundation to achieve this goals.”

ACCA is of the thinking that the days of treating sustainability and strategy as two separate priorities are over and the long-term impact of climate change means that these risks need to be fully integrated, and ‘priced into’ the strategy.

To conclude, is the report commissioned by ACCA and the announcement made by the IFRS Foundation a response to the cri de coeur by the former Chief Executive Officer of TNT N.V, Peter Bakker in his Harvard Business Review thought – provoking essay titled “Accountants Will Save the World” when he quipped that in order to get all businesses involved in solving the world’s toughest problems, we must change the accounting rules?

Seemingly the mandate of professional accountants is not just to protect the public interest but safeguarding the planet for our future generation is equally an important a mandate…!

Sources:

1. https://www.standard.co.uk/news/uk/lewis-pugh-cop26-greenland-glasgow-english-channel-b963989.html
2. No one is too small to make a difference, Greta Thunberg
3. https://www.accaglobal.com/an/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/climate.html
4. Climate Action and the Accountancy Profession: Building a sustainable future.
5. https://www.ifrs.org/news-and-events/news/2021/11/ifrs-foundation-announces-issb-consolidation-with-cdsb-vrf-publication-of-prototypes/
6. https://hbr.org/2013/03/accountants-will-save-the-worl

Why does an accreditation of another professional body by the IRBA matters?

The Accreditation of another professional body by the regulator will accentuate transformation efforts in the Audit and Accountancy profession and accelerated economic opportunities for the under – represented groups.

The reform in the Auditing and Accountancy profession is well under way across the globe. South Africa is no stranger to these reform initiatives. The United Kingdom which is normally a pathfinder in initiatives surrounding reforms in the Auditing and Accountancy profession has completed important commission of inquiries in reforming the profession in ways that its legislatures deem fit.

The Audit Regulator in South Africa is also engaged in its own initiatives in reforming the audit profession. Chief amongst these recent initiatives include the promulgation of the Audit Profession Amendment Act with its own objective of strengthening IRBA as a regulator. Another reform initiatives that IRBA is engaged with is that of looking at awarding another professional accountancy body with the IRBA accreditation so as to enable members of that professional accountancy to practice as Registered Auditors and be issued with an Audit Licence as a result.

To this extent, IRBA has stated in its 53rd edition of its newsletter that it is looking at awarding the Association of Chartered Certified Accountants (ACCA) an audit accreditation so as to enable its eligible members to be able to become Registered Auditors. Registered Auditors by virtue of the Audit Licence/Practicing Certificate are empowered by the IRBA to be able to become Audit Partners and be able to express an opinion on the financial statements audited and thus sign such financials.

The awarding and eligibility of a professional accountancy body for IRBA accreditation will bring about more positives than negatives as I outline in the following paragraphs.

As IRBA has already vocalised its intention to award the Association of Chartered Certified Accountancy (ACCA) with its accreditation, let me then use the ACCA as a proxy and an example for the purpose of this article. For ACCA to be awarded this accreditation, then it would need to meet the requirements of IRBA’s accreditation model in all respect to the satisfaction of the Accreditation Committee (ACCOM), a sub – committee of the Education Committee (EDCOM) established for this purpose.

ACCA’s value proposition is that it is a professional body offering an accountancy qualification to anyone of a considerable drive, talent, and ability to become a Professional Accountant cementing its commitments to remove elitism and break artificial barriers that often exists amongst other similar leading Professional Accountancy Bodies and their premium qualifications.

In the South African context there are three main things, in my view, that are crucial in the profession, namely, (i) access to the profession, (ii) transformation (iii) Opportunity of work & Skills development.

Access to the profession:

In as so much as there are over 13 Professional Accountancy Organisations with presence in the country, it is the South African Institute of Chartered Accountants that remains a professional body that enjoys a prestige of some sort and its members enjoy holding its premier designation CA (SA) enjoy privileges of preference for employment opportunities. However, to be able to attain this CA (SA) title, a prospective member needs to have attained tertiary qualifications accredited by SAICA for this purpose. This effectively means that one will need to have a relevant degree, then a Certificate in the Theory of Accounting (A postgraduate qualification) with all the modules passed in one examination sitting prior to them to be eligible to write SAICA’s two Qualifying Examinations. This means that SAICA’s future members who struggle to raise necessary finances or whose life experience are not conducive for this type of academic and time commitment may never be able to become Professional Accountants with this body – a tapestry that has characteristics of artificial barriers in its design.

Enter ACCA, a qualification that is cost – effective and flexible in its design enable people with afore -mentioned circumstances to be able to pursue a Professional Accountancy Qualification at the convenience of their financial and lifestyle circumstances. This breaks the barriers which exists with the manner in which qualification processes of other professional bodies are designed. The ACCA’s examination delivery model also allows its future members the much needed flexibility to plan and sit examinations surrounding their lifestyle needs, as they are able to register for a number of qualifying examination that they can afford at every examination sitting. ACCA offers four examination sitting opportunities in any given year with the elementary papers being made available on demand.

This is indeed deeply encouraging to a prospective Professional Accountant and thus allows seamless access to the profession to many people who otherwise wouldn’t have access to the profession and an opportunity to qualify as Professional Accountants.

Transformation:

In the South African Accountancy Profession’s landscape, transformation is twofold. One aspect is on the opportunity for the designated groups who were previously disadvantaged to be able to dream and to attain a qualification that is respected globally and the other equally important aspect is that of Small & Medium Enterprises who are black owned to be able to capacitate their emerging practices without having to deal with often restrictive requirements that accompanies how those founders & owners of these SMEs are often confronted with whenever they attempt to be a registered training office by certain Professional Accountancy Bodies.

This allows SMEs to be able build capacity to be able to compete for lucrative audit contracts that often requires a bigger human capital as qualify criteria to progress to the next stage of evaluation – a functionality requirement that is imposed on a bidding SME whose limitation has been restricted unduly by the requirements of some professional accountancy bodies as per their Training Regulations. Some of the Accountancy Professional Bodies requires accredited training offices to pay a levy for it to be an approved training office – a barrier that threaten the very existence of an emerging SMEs. The greatest advantage of ACCA is that for an emerging SME to be an approved employer, no limitation is placed on that firm’s ability to recruit members as there is no maximum number of trainees per director as is the case with other Professional Accountancy Organisations and no fee is payable to ACCA for an emerging SME to be approved by ACCA for this purpose. Lastly, an SME would actually be able to plan resource allocation based on its busy season and will thus be able to convince its trainees to sit exams around that firms’ schedule as ACCA offers flexibility in terms of when can students sit for qualifying examination.

This serves as a distinct advantage that will accelerate transformation that the Advancement of Black Accountants of South Africa (ABASA) has been calling for donkey’s years.

Opportunity of work & Skills development:

At this point we can all agree that Finance & Accountancy skill remain a critical skills whose shortage is severe, and this is supported by the research conducted by the Finance and Accounting Services Sector Education and Training Authority (FASSET). The accreditation of ACCA by the IRBA will accentuate more work opportunities for those future members who would want to qualify with the ACCA. That need will be driven by the fact that due to the absence of limitation on audit resources alluded in the preceding paragraph, more SMEs will be able to be on massive recruitment drives to secure work opportunities and skills development for ACCAs future members and for those SMEs to be able to build capacity in order to be compliant with some of the bids requirements for audit work.

Even though members of SAICA remain sought – after finance professionals in the global north especially in countries who are signatories to the Global Accountancy Alliance (GAA) and Chartered Accountants Worldwide (CAW), more South Africans with ACCA will be portable as well – a distinct advantage for our economy as South Africa will be known as a country exporting most professionally qualified Finance, Audit & Accountancy professionals – a competitive advantage that South Africa needs owing our lack of export competitiveness in sectors such as manufacturing.

Therefore, an idea that an accreditation of another Professional Accountancy Organisation by the IRBA will devalue the standards of the profession in the country and diminish the aspirations of future professional accountants remains a perception that is untested, false and spread by those who are of idle – thoughts.

The accreditation of another professional accountancy organisation by the IRBA is an audit reform initiative that is urgent and critical for profession’s trust restoration process.

To enable opportunity to the citizens of this country in this way is to empower their economic livelihood and thus cement South Africa’s Accountancy Profession a valuable and a crucial player in global economics.

It is against this background that I am vehemently in support of IRBA’s effort to accredit another professional accountancy for its audit license.

As the day cometh, the regulator’s importance will thus proveth itself worthy of a regulator upon whom the investing public can place its confidence & Trust!

Can the path taken by KPMG be an instigator for audit reform process in South Africa?

In February, one of the big 4 firms in South Africa, KPMG announced that it would stop offering non – audit related services to its listed clients effective 31 March 2021. This is seminal in the audit reform process. Audit reform is a key initiative to restore trust in the profession and rebuilt the profession that is fit for purpose, is sustainable and is relevant in developing economies of the world.

In making the announcement, The Chief Executive Officer (CEO) of KPMG, Ignatius Sehoole stated that “While this is an area that is typically already very well managed by audit committees, (particularly those of listed audit clients), the objective of such a move is to help restore trust in the profession, as it removes any perception of conflicts of interest with our audit work for listed entities.”

It was a bold and a courageous move by KPMG South Africa to come to this decision given the consideration that non – audit services generate a substantial revenue and profits for Big 4 audit firms. To live up to its vision of being the most trusted and trustworthy professional service firm, such a move is consistent to that mission and how serious the firm is in serving the public interest.

There has been a number of initiatives by the Independent Regulatory Board of Auditors (IRBA) to reform the industry. At the heart of that reform sits the notion of auditor’s independence. To this extent, the regulator introduced the Mandatory Audit Firm Rotation (MAFR) which will come full cycle in 2023. Certain listed firms have resolved to early adopt this regulatory measure in anticipation of this regulatory requirements cometh the hour.

As users of financial statements, a change in the audit firm and lead engagement partner does to a certain extent instil a measure of confidence in the audited financial reports as opposed to financial statements that are audited by an audit firm who have a long-standing relationship with an audited entity – some of those relationships extending a tenure of 110 years and more.  

Due to corporate collapses in the United Kingdom and a perpetual erosion of trust in the profession, the legislators in that country initiated various commission of inquiries into the audit profession. The review by the Market Conduct Authority (CMA), Sir John Kingman and Sir Donald Brydon are some of the inquiries in the recent past that gave recommendations and remedies with varying degrees of impact for the profession should these be taken to heart by industry participants and stakeholders.

The third remedy in the Market Conduct Authority (CMA)¹ report recommends that there should be a strategic and operational split between firms’ audit and non-audit services practices, including separate governance and strategy, separate accounts, and remuneration policies, and no profit-sharing between audit and non-audit. The goal of this remedy is to strengthen the focus of auditors on delivering good audits, to remove the distraction of non-audit work, and to give audit practices incentives to bid competitively for more audits.

The goals as stated is key in driving the audit reform process and does harbour potential of restoring trust in the profession – perhaps a goal that remains an elusive dream.

As noble a step taken by KPMG South Africa, what the firm did though was to implement a part of a remedy recommended by the CMA and not an entire remedy under the paragraph – however, the firm should be commended for being a pathfinder internationally for adopting a part of this remedy. Perhaps, future announcement by the firm will be a build up from this one important action – a shift in a positive direction.

In addition to the IRBA’s reform of Mandatory Audit Firm Rotation, the regulator pursued Parliament of the Republic of South Africa to amend its Audit Profession Act to include amongst others investigation powers, power to subpoena and enhanced measure of disciplining audit practitioners. However, as an invited stakeholder, during those deliberations on 14 October 2020, I submitted through an inquiry whether South Africa is ready for an audit reform process? I held a view then that, until such a time the regulator has enhanced the bill that was under discussion to include comprehensive regulation of the accountancy profession, the industry in South Africa is still not ready to engage in the audit reform processes.

KPMG in this measure is demonstrating to every participant in the sector that indeed, an audit reform process is a possibility when there is a will. After all, its Chief Executive Officer said that he hopes that the step they took will bear a testament for the industry that will result in enhanced independence model.   

A reimagined audit future demands that all actors in the audit process bear some measure of responsibility as observed by Sir Donald Brydon in his review.

Source:

1. Competition & Market Authority (CMA) – Statutory Audit Service Market Study: Final Report 2019

Setlamatlama – A Perpetual Hangover: Professional Accountancy Organisations and their quest for relevance

In its search for the next Auditor – General of South Africa, the Ad – Hoc Committee on the Appointment of the Auditor – General conducted interviews to identify the best person who would satisfy a criterion of fit and proper. Five Chartered Accountants were interviewed, three were members of the South African Institute of Chartered Accountants (SAICA) and two members of the Association of Chartered Certified Accountants (ACCA). It was however a candidate in the name of Ms. Tsakani Maluleke who would later emerge as the best candidate for the role.

During her interview, Ms. Maluleke stated a stark reminder for the members of the profession when she quipped:

“…. essentially, we need a social compact and the only way to do that is by building trust. And for me trust is underpinned by a commitment to transparency, to performance and delivery, to accountability and ultimately to maintaining the integrity of institutions. Without trust we are not going to build the social compact we need, and we are not going to get the collective action on our challenges. Without trust, we are not going to get South Africans to accept that these are our collective problems which need all of us to accept that we are all in it together and we must deal with it.”

Ms. Maluleke statement is profound in its design and significant in its relevance because she on that day was again reminding members of the accountancy profession that the role of accountants and auditors is way bigger than their individual self-interest.

The outbreak of the Novel Corona Virus (COVID 19) brought world economies to a stand still with many people losing their lives and livelihoods. But COVID – 19 exposed another deeply entrenched pandemic in a form of endemic corruption. While governments and their citizens were mobilizing resources to win the battle against Corona virus, others saw a golden opportunity in exploiting weak controls, systems, and procedures in several government entities.

In March of 1859, the mighty pen of Charles Dickens danced to a string that would form a theatrical piece, a Tale of Two Cities. Dickens begins “It was the best of time, it was the worst of time, It was the age of wisdom, it was the age of foolishness, It was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way…”

Dickens’s articulation is true during this pandemic as I would imagine was on that day in 1859. It is true because the virus brought the worst of pain, organised confusion, and everything that we had was taken away by corruption practitioners to a point where there was nothing before us. As the health system was stressed, medical doctors and scientists brought us hope.

As those who unfortunately lost the battles to this darkness were going direct to heaven; professional accountants were all going direct the other way. Allow me to qualify my statement. It was the best of time for accountants and the bodies to which they belong to work together as a collective to respond to the challenges brought about by the outbreak of the Corona Virus. As systems of internal controls were left exposed, the accountancy profession remained quiet in proving its importance and relevance.  

I wrote on my LinkedIn profile that as accountants and auditors, we are ought to get to a space where we work together in unison to advance various issues facing our economies instead of debating the pre – eminence of one body over another and which members of an accountancy body is more deserving of an executive role. The comments that followed from that post were both astonishing and amusing to my soul.

What kind of a members of the profession are we that we miss such a spring of hope in collaborating our collective wisdom to design systems that would prevent abuse in the procurement system as we battle this virus? I wondered aloud!

I later had an epiphany that perhaps we do not care with debating solutions because as members of various professional accountancy bodies we are suffering from a setlatlama (hangover) of some sort that set us back in perpetual history when the profession was still inaccessible, had artificial barriers and was exclusionary to certain ranks of the population. As we battle transforming the profession, the perpetual hangover of the profession sins still lingers on our heads – with many members of the profession still harbouring an epoch of belief that to open the industry is to compromise the standard of the profession.

We cannot be as a profession linger with all sorts of perpetual hangovers when the worlds economies need the profession to confront damages brought about the pandemic. To be a profession that is relevant, collaboration and unified voice has never been so urgent than today. Due to vocation and training being a fibre of each individual, many professional accountancy bodies were able to pivot and continue delivering value to its members, students and stakeholders.

The next wave of a global threat might not be so generous to professional accountancy bodies and the survival of such bodies cometh the hour will be dependent on how relevant they are in responding to that threat.

Many Professional Accountancy Organisations remain elitist in their operation, exclusionary in their membership base, artificial in their barriers, lack clarity in their strategy, and unagile in their evolution. Those are unfortunately core elements of a DNA of a professional accountancy organisation that is critical and haemorrhaging in its existence. The outbreak of the next global threat will be a switch that will stop the flow of air into the lung of these PAOs.

It is significant to mention that PAOs are not only bodies that award designations, but they are also Non – Profit Companies whose Finance Executives are working hard to find ways to generate additional streams of income and to ensure their financial sustainability into the future. If the PAO to which you belong is relying heavily on donations from its wealthier members and sponsorships from government initiatives and the insignificant portion of its revenue is derived from membership subscriptions, training fees, and fees from professional exams – perhaps in its next Annual General Meeting or Members Assembly, you must propose an agenda where the business model of that PAO needs to be redefined.

The rise of strategic partnerships and alliances is another way in which members of the profession can collaborate in devising solutions that the world needs.

As Maluleke alluded in her interview that there is a need for adequate partnership and collective action in pursuit for a common purpose. This again is indicative that professional accountant’s need for collaboration to confront societal challenges would be key in cementing the profession’s relevance.

The era of competing as members of the profession has reached its sell – by – date and working in collaboration to restore trust and enhance reputation in the profession is now urgent.

A compromised profession, a race for trust restoration and a need for comprehensive regulation

The auditor occupies a unique role in our society and economy. Lots of people have things to say about the running of any major company, for good or bad. But only the auditor combines an independent viewpoint with unparalleled access to the internal workings of the company. The auditor has the right and virtually unlimited opportunity, should he or she wish, to interrogate the company’s directors, management, employees, systems, processes and information.

Sir Donald Brydon

At a wink of an eye, the principles enshrined in the Accountant’s Code for Professional Conduct of the International Federation of Accountants (IFAC) offers a glimmer of hope for a profession that is trusted and enhances confidence for the investing public and related stakeholders. Grand of this principle is what is termed “professional skepticism“. Professional skepticism can loosely be defined as “being alert to conditions which may indicate possible misstatements due to error or fraud.” Perhaps, it is for this reason that the investing public expect auditors to look with a keen eye to conditions that if undetected may leave their interests exposed to huge losses.

It was a summer of 2017 in the Republic of South Africa, when an international conglomerate in the name of Steinhoff reported that their financial results would be delayed due to technical issues arising from technical disagreements between itself and its auditors. A deluge of similar cases in subsequent years emerged. Government, Institutional investors, Pensioners and Private individuals lost money as a result of these corporate failures – a R100 loss is too much a loss for a prudent investor.

These losses are not only confined to a geographical location in the global South – they are present across the globe. Whenever auditors and other assurance providers are challenged on their failure to detect and report on fraud that ensued in these companies, often a times an excuse of “expectation gap” is advanced.

Is a reason for “expectation gap” good enough an excuse for failures of auditors to detect fraud if an important principle in “professional skepticism” creates an expectation for them to detect misstatements and fraud?

It has become so unfortunate that these events has led to a point where the accountancy profession’s social contract has lost its ideal for being a preserve of public value. The accountancy profession has become tainted with all sorts of negative press ranging from suggestions that professional accountants have become enablers of state capture to ideas that auditors have lost their mandated purpose as they chase revenues and client retention at whatever cost. This notion suggests that the accountancy profession has become compromised and is losing its flair – perhaps its relevance.

In restoring trust, legislators across the globe are working tirelessly through various measures of audit and accountancy reforms – a task that requires huge investment in time, expertise and financial resources. How can a profession so revered lose its relevance so willy – nilly?

Stakeholders remain dissatisfied, practitioners continue buying yachts and the United Nations’ ideals of zero hunger as contained in the Sustainable Development Goals remain an elusive dream.

Sir Donald Brydon in his speech delivered to members of the Audit and Assurance Faculty of the Institute of Chartered Accountants of England and Wales (ICAEW) remarked that the auditor exists fundamentally to help enable shareholders and other users of company reporting form a view on whether the audited company deserves to be a recipient of their confidence. Clearly confidence is an instrumental tool in this profession, yet each corporate failure erodes trust in the audit product and other assurance report.

To respond to the race towards trust restoration, lawmakers in the Republic of South Africa have in October held a public hearing where interested stakeholders were called to make submissions into the proposed amendments into the Audit Profession bill. The bill seeks to impose greater sanctions and refine ways in which accountability and discipline can be enforced. Many stakeholders made brilliant suggestions in line with what the Parliamentarians requested. I, as an interested stakeholder in the profession submitted that it wouldn’t be beneficial for this bill to only regulate auditors, whilst the reporting value chain extend beyond that domain. I then suggested that the bill be expanded to include the regulation of other parties in the accountancy space. I held a view that comprehensive regulation will strengthen the oversight mechanism expected of the Independent Regulatory Board for Auditors and will indeed hold those who intentionally perpetrate fraud in financial reports.

Comprehensive regulation has been a phenomena that have been suggested to the South African Ministry of Finance in 2013 by the World Bank in its Report on the Observance of Standards & Codes (The ROCS Report) as a necessary legislative reform to enhance the accountancy profession in the country. It is a no brainer that auditors are heavily sanctioned across the globe for their audit failures – sometimes fines fetching a tune of £5.6 million in countries such as the United Kingdom – whilst company directors are left unchecked. This does not include a paltry R200 000 fine imposed on South African auditors – a sanction many views as a slap on the wrist.

All role players in the financial reporting value chain, including those who happen to be in governance roles should be comprehensively regulated and heavily sanctioned as auditors when they fail to discharge their responsibilities of trust. To this extent, Sir John Kingman in his report recommended that the audit regulator of the United Kingdom, The Financial Reporting Council (FRC) be disbanded and replaced by the Audit, Reporting and Governance Authority (ARGA), an authority that will see professionals in these domain and the accountancy bodies to which they belong comprehensively regulated.

Others might argue that over – regulation might ward off interest in these domains, but self – regulation like no – regulation offers more harm than good.

The importance of comprehensive regulation is more urgent and perhaps that is the reason behind the amendment of the Public Accountants and Auditors Act in Namibia. It is however interesting to me that Namibia borrowed this law from South Africa and yet it is now reviewing it to include comprehensive regulation before South Africa could do so. In its defence though, following public hearing, the National Treasury made a commitment to Parliament that it would be submitting this bill again before it in 2022 for lawmakers to include comprehensive regulation in this law as I suggested so as to enable the IRBA to be a comprehensive regulator – a move I believe would help in restoring trust, enhance confidence and narrow the expectation gap.

Around the globe, there is however an unprecedented pressure to reform the audit and accountancy profession with a sole aim of restoring trust and regaining the nobility of the profession. It would indeed be unfortunate if South Africa continue to trail behind in responding to the need for this ever – important regulatory reform.

As comprehensive regulation seeks to strengthen regulatory oversight, this measure carries a potential of discouraging company’s directors from engaging in earnings management that is often characterized by short – termism and total disregard for agency – theory!

Where is the regulatory body when competence and ethics fails?

Regulatory auditors enjoy a privilege status in the world and the broader market rely heavily on them to make decisions that impact their livelihood, personal wealth and to a greater extent their legacy. When auditors express an opinion on the financials they have examined and conclude that such statements are in all material respect free of errors and are fairly presented, then it follows that the users can with no shadow of doubt place reliance on every figure that is contained therein.

It is not a surprise then that the society at large have treated auditors with so much respect, a privilege that earned these professionals some degree of prestige, esteem and honour. Later, it would emerge that these professionals (or at least those who signs off) these reports would enjoy a pretty rewarding career.

These auditors are mostly professional accountants who are registered with various chartered accountancy bodies. There is an impression that as they practice their duties and discharge their responsibilities they will at all times adhere to moral obligation of professional competence, ethics and integrity.

In the recent past, leading financial publications both in South Africa and abroad have carried headlines that suggest that professional accountants are failing to carry out their duties with the utmost competence and integrity that the society expect them to. In south Africa and across the globe, we have witnessed scandalous failings of corporations under the watchful eyes of these professionals.

In South Africa, Steinhoff and VBS Mutual Banks collapse shone a radiating light into the profession that is certainly in need of some serious intensive care for its lapses in ethics. The integrity in this profession has come to a state that that is hemorrhaging – it is indeed a worrisome phenomenon that the ethical compass in this profession is in a critical but semi – conscious state.

In the interest of a condensed piece of writing and a comprehensive argument, allow me to restrict this piece to the state of affairs in South Africa.

It has been a disappointing observation to witness the arrays of issues besetting what is a pre – eminent brand (if it still is at all) for local Chartered Accountants. The issues facing the South Africa’s CA (SA) brand is a matter of “clean a house” exercise, a job that requires a collective and a united energy from members of the South African Institute of Chartered Accountants (SAICA) and to some extent those who aspire to be designated a CA (SA) letters.

When a professional body is faced with issues that questions the professional competencies of its members, ethics and integrity that is embodied within the qualification, the unintended consequence is that its brand equity suffers. The suffering of a brand equity ultimately leads to a loss of trust and disregard of the value it holds. The calamitous aspect of these is that once a respected accounting brand loses its worth, accounting as a profession in South Africa faces a threat in succumbing to the wounds as a result of the aforementioned.

The prospects of accounting practitioners and their livelihood will be greatly compromised should the broader market lose trust in accountancy.

Enter the Independent Regulatory Boards of Auditors (or IRBA), a watchdog in South Africa regulating those who practice as Regulatory Auditors in South Africa. In my view a regulatory body as the IRBA is supposed to be more active in guarding the profession of accountancy in the country.

There is a dilemma though, what are we talking about when we talk about the accountancy profession in the South African context? Are we solely talking about SAICA and its CA (SA) or do we also refer to members of other professional accountancy organisations, if we are to consider them at all?

If the market is to lose trust in accountancy professionals and CA (SA)’s in particular, then the responsibility of such a failed affair should squarely be pointed to the IRBA. The IRBA has in many ways in its current form [and its predecessor, the Public Accountants and Auditors Boards (The PAAB)] enabled a conducive environment for the state of the profession to be finding itself in this juncture through its sole accreditation of SAICA as a recognized body in its books.

There are twelve professional bodies with presence in South Africa, and amongst them are globally respected bodies such as the Association of Chartered Certified Accountants (ACCA), Chartered Institute of Chartered Accountants (CIMA). SAICA, together with these bodies, including another home grown qualification, the South African Institute of Professional Accountants (SAIPA) are members of the International Federation of Accountants (IFAC). These bodies means that they operate under unregulated terms, however, when a local brand suffers they also participate in the resultant consequence of its local peer.

The counterparts of IRBA in other countries regulates and recognizes other professional accountancy organisation in addition to its local professional body. This allow its citizens to have access to the broader profession as there are various options to do so – thereby possessing a greater pool of people in a country with financial competence and knowledge. Another benefit of a regulatory body regulating “everyone” is that accountants are being regulated under the same standards and codes and as such they can be sanctioned by the same regulator with relative ease. I hold a view that an active regulator who recognizes everyone truly promotes collaboration amongst professional bodies as the element of being seen as a dominant player in the market is systematically eliminated.

Collaboration would have come in handy in addressing the current quagmire that the accountancy profession finds itself under. The collaborative efforts would range from using resource of one another in addressing issues such as ethical dilemmas to together producing research content that ultimately contributes in the body of knowledge that would really reinforces accountancy as a significant contributor in aiding South Africa in truly becoming and building a capable state.

The World Bank Report on the Observance of Standards and Codes (ROCS) in its report recommended that there should in South Africa be a legislation to provide for legislation over the regulation of professional accountancy organisation. In the 2018 annual report, the Chief Executive Officer, Barnard Agulhas in his report quipped that due to the challenges faced by some companies, the oversight mechanism of regulating everyone in the financial reporting value chain is strongly needed.

I am mindful that it is not a responsibility of a regulatory body to heavily sanction professional accountants when their ethics and competence is brought into question, however, I am of the view that through promoting competitiveness by allowing access of other professional accountancy to an extent that they meet the requirements of its accreditation model into the auditing space, the issues currently faced by the profession would be averted as accessibility will bring forth more auditors who are potentially competent as they would have been trained differently by another professional accountancy body – a measure that would force such professional bodies to join forces for the enhancement of audit quality.

Where is the regulatory body when competence and ethics fails?

Zero skin in the game, governance failures and trust gone

The front cover of the investigative report into the VBS Mutual Bank

 

 

faced with what is true, to leave it undone shows a lack of courage” ~ Confucious

 

Advocate Terry Motau SC handed his investigative report volume one to the Prudential Authority titled “The great bank heist”.

The report stated that the purpose of the investigation was to to establish whether or not ”any of the business of VBS was conducted with the intent to defraud depositors or other creditors of the bank, or for any other fraudulent purpose”.

It said that  “VBS’ business conduct involved questionable and/or reckless business practices or material non-disclosure, with or without the intent to defraud depositors and other creditors”

It further said that “there had been any irregular conduct by VBS shareholders, directors, executive management, staff, stakeholders and/or related parties.”

The findings in the report made by our learned friend, Motau SC draw attention to the blatant looting that happened at VBS Mutual Bank, directors who failed in their fiduciary duties and a rogue auditor who dramatically failed to protect the public trust and uphold public value.

The report is quite extensive in nature and perhaps my commentary will be restrained to business veins in as so far as the following matters are concerned:

i) Governance and the fiduciary role of directors

ii) Auditors as enhacers of public value

Governance and the fiduciary role of directors

A quick internet search will reveal to you that the term “fiduciary” is ascribed meaning that suggest that an  individual in whom another has placed the utmost trust and confidence to manage and protect property or money.

In the sorry tail of VBS, its shareholders appointed and elected upstanding members of society whom by accumulation of certifications as Chartered Accountants and Attorneys placed utmost trust and confidence to manage and protect their property or money as the word fiduciary prescribes. Shareholders then expected nothing other than these officers to find legal ways and sound business models to maximise their wealth. I am using the words “legal” and “sound” deliberately, as one would argue that such officers did devise a business model that would ultimately enhace the wealth of its shareholders.

We are told then in the report that VBS as a legal entity embarked upon obtaining deposits from municipalities in South Africa. The corporate governance framework that regulates financial affairs and related matters, the Municipal Finance Management Act (“The MFMA”) precludes municipalities from depositing its funds in a bank that is not registered in terms of the Bank Act. A mutual bank as it is the case with VBS was not registed in terms of the Bank Act.

The business model devised and implemented by these directors was neither “sound” nor “legal”. Perhaps, these directors did so to either blatantly ignored the law governing their entity or their understanding as directors was completently non – existent.

An effective director is someone whose goals are alligned to that of its shareholders, or what learned business theorists call agency. Furthermore, it a performance duty of a nominated director to at least exhibit what Nassem Nicholas Taleb described as having skin in the game.  Having skin in the game means that a person have something to lose while pursuing risks. In all instances, we are pretty certain that directors of this entity were pursusing risks, whether they stood to lose something in their endevour, is a revelation that will be uncovered in due course.

Various governance codes across the globe (be it “The king Code”, “The SOX” or “The Turnbull Report”) equips persons who are placed in the position of trust and responsibility with tools and a compass to direct and admister such enterprises in a manner in which shareholders interst will be preserved and their wealth maximised.

Auditors as enhancers of public value

In the past few months, the auditing profession has done more to disappoint those who utilise its audit reports to inform their judgement. Stakeholders place a heavy reliance on the opinion of the auditor as is the expectation that an auditor having examined the   books of the entity will express an opinion that reflects the actual state of affairs of the company being audited.

What really keeps the work of an auditor intact is public trust. The credibility that is provided by auditors can be accepted as a gospel truth because he had a privilege access to the affairs of his client. All professional accountancy bodies aligned to the International Federation of Accountants (“IFAC”) requires their members to demonstrate a duty of care & competence and to posses professional ethics in abounding measures.

The testimonies advanced by the members of the audit team responsible for the VBS audit points out astonishing revelations about the behaviour and professionalism of the lead engagement manager or the “audit partner”. The testimonies in this part of the report suggest that in one way or another, the audit partner over – stepped his responsibility as an auditor and engaged in an activity prohibited by the profession as I would later demonstrate.

The report suggest that the audit partner in addition to auditing the books of VBS, also assisted and protect his client’s management from whatever illogical activies that they engaged in.

Having gained unrestricted access to the books of the audited entity and such professionals have conducted their audit, the lead engagement manager would sign off  an auditors’ report certifying the actual state of affairs as observed by the audit team. The credence of the Integrated Annual Report rest in the green pen of the auditor. For whatever the audit opinion is, stakeholders will then depend on the credibility of the audit report to inform their judgement. Hence it is believed that the primary responsibilty of the auditor is to uphold the public interest and enhance public value.

It is apparent as revealed by the investigative report that the lead audit engagement signed off unqualified audit opinion blatantly based on falsified financial statements and affairs of VBS.

The professional compentence of auditors and their perceived independence is thee most prized commodity that they need guard with their reputable fibre.

Parting shots

If the audit profession is to uphold its credence, the profession at large will need to introspect and respond in ways so magical as to boast the confidence of the investing public and the broader users of finacial statements.

The prosperity of the country’s economy and perhaps its bill of finacial health rest in efficient functioning of regulatory authorities and the auditors protecting their reputation.

The heart breaking reality in this whole VBS saga is that depositors as shareholders of the bank have lost their hard earned financial resource that they will never recover.

The directors of the bank failed in their fiduriary responsibilities as mandated by the banks’ shareholders. Perhaps, if the directors had a skin in the game, they would have headed the words of Confucious when he said ““faced with what is true, to leave it undone shows a lack of courage.” It is apparent that the directors of VBS had all the facts handy to perform their governance responsibilities, but they turned a blind eye as they evidently lacked courage.

Lastly, if auditors were to take an oath of office it is this, to enhance public value so as to boast confidence of the investing public as we endevour to contribute to economic growth of world economies.

To be trusted is to be given a breathin apparatus. Be an admiral in that responsibility!!!

 

 

 

 

Inspire me once more…

In 2013, I wrote an article urging youth to go vote in the election that were to take place the following year. I concluded that article by saying “until 2014. Let freedom reign”. Unfortunately that was not to be. Instead in 2014, I entered a new phase of my life as trainee accountant and a student pursuing a professional accountancy qualification. That stage of my life, led me to inadvertently go on a hiatus and I took a sabbatical from writing on this blogsite.

As I am on a pilgrimage, I am in a constant search for inspiration and it is in this light that I am inviting you to inspire me once more. This is to say that I am back from my 5 years hiatus and thus require you to walk this journey with me. In those days you inspired me greatly and you engaged with the articles I penned. That was uber inspiring, educative and at most entertaining.

During the past five years a lot has happened in the world. When I last wrote on this website Kgalema Montlanthe was still the interim president of the Republic of South Africa, Cyril Ramaphosa a Chairman of Shanduka and uber was just a word in the dictionary. Today, we are experiencing a whole new world, a new dawn and we are living in what is decoratively termed the fourth industrial revolution.

I have grown since then and lot of my views have changed. However, what remains is my passion for literature, writing and robust engagement and dialogue.

Before I sign out allow me to reintroduce myself. I am Dumisani Mahlangu, I am a trained accountant and I am trying to be admitted into the Association of Chartered Certified Accountant (ACCA) as a Chartered Certified Accountant. 1 more exam to go towards that ideal. I am an auditor by day, have a zest 4 life and I am 4:23 marathoner.

C’mon journey with me and as you did then, inspire me once more!!!

You(th) we need you to vote……

As citizens of this democracy, you are the rulers and the ruled, the law-givers and the law-abiding, the beginning and the end.
Adlai E. Stevenson

 

It is well documented in the history books that this liberation came at a cost of human life at worst. We were indeed liberated for a cause. A cause to honour freedom and all the responsibility that comes with it. One such responsibility is the duty to participate in democratic processes.

As the current year draws to a close, the coming year promises to be a fun in the political landscape. You might be aware that 2014 is the year in which we as a country will be electing a new leader, or a new ruling party. A leader who will take our South Africa to a path of prosperity, a path that will ensure that every human being concede equal citizenship no matter the abuse by those we seem to elect.

For the status quo to prevail someone with a powerful voice as yourself will need to take an apathetic stance and choose not to partake in this crucial activity bestowed by democracy and freedom. Within your inner being, therein lies a powerful force which can see a ruling party relinquishing its robes to that party you might have voted into government or (if you are happy with the ruling party you just keep the status quo and vote for it).

As one scroll down feeds on social networks, one gets a sense that those who are active on this platforms and also happens to be a large population of our country, the youth are not so much concerned about exercising the right that many people died for, the right to vote. Young fellows, lend me your ear, however disillusioned you are about the prevailing state of affairs in our country, deciding against voting is committing an error in judgement, an injustice if I may tell you.

As you head toward the ballot box next year, keep in mind many people who laid down their lives, so that me and you, can be able to exercise this democratic right called voting. Be an active citizen, vote well because the truth of the matter is that this is a privilege that most people in the world are deprived of. You could have been born in a country where absolute monarchy is still the order of the day….. just give it a thought?

Cometh the hour, put down your smartphones and vote. I have heard many people saying they will not be voting. Now saying that you will not be voting is tantamount to irresponsible utterances. I suggest that instead of abstaining altogether from voting, you rather spoil the ballot.

It seems sinister on the surface to spoil the ballot, but is equally powerful as electing a particular party or a particular individual. Spoiling the ballot for me in particular means that there is no alternative party that I trust with my cross. I can also argue that, by opting for this seemingly no-brainer exercise called spoiling the ballot, that seek to communicate to those in power that as much as I would like to vote, there is no party that speaks to my needs and I am quite discontented by the prevailing state of affairs.This too is a loud voice, it is louder than those vuvuzela at a soccer stadium between the two Soweto giants.

Therefore, young soldiers, it is an irresponsible thing to utter something as “I will not be voting”. the dangerous aspect of this talk is that your silence might hinder the change that a certain political party so desperately need.

Without your vote, our democracy is hollow. As a matter of fact, never discount the value that your single vote have. It remains a potent tool in our democratic state to effect change (…and in Justice Malala’s word) “and a new order which will make a real difference in your life”.

Until 2014, let freedom reign…!!!