CA charter

Accountancy SA,  Mar 2008  

Tags: Computer Associates International Inc.

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ACCOUNTANCY PROFESSION UNVEILS EMPOWERMENT CHARTER

CA Charter insists chartered accountants have a duty to support broad based empowerment

The Chartered Accountancy [CA(SA)] profession's Broad-Based Black Economic Empowerment (B-BBEE) Charter was signed in Johannesburg towards the end of 2007.

The CA Charter, some four years in the making, promises to play a pivotal role in helping to solve the critical skills shortage currently plaguing South Africa's accountancy profession.

"To create an environment in which economic growth may continue while facilitating effective transformation, the skills profile of our population must move towards reflecting the country's demographics while still meeting growth needs and maintaining standards," said Ignatius Sehoole, Chairman of the BEE Negotiation Charter Forum of the CA(SA) profession.

The Charter's primary focus is therefore on skills development aimed at increasing the number of black (especially black women) Chartered Accountants in South Africa.

"Since 1976, only 912 Africans have completed the requirements to register as a CA(SA); a number that compares unfavourably with the total of 26 803 CAs(SA).

"Transformation would therefore take too long if left purely to economic forces," Sehoole said. "Active, large-scale intervention is required to redress the situation."

He maintained that CAs(SA) had a duty to support B-BBEE. "The benefits that will flow from a successful BEE programme are immeasurable and will accrue to everyone."

Hence the CA Charter, which had been drafted such that it could be tailored to the profession's unique needs while simultaneously laying down BEE weightings that resembled the national BEE ratings and the Department of Trade and Industry's (dti) Codes of Good Practice.

Sehoole, who is also the Executive President of the South African Institute of Chartered Accountants (SAICA), highlighted the BEE Charter Negotiation Forum's broad representativeness.

Meaningful input from all such parties over the past three years was to result in the dti gazetting the Charter - one of three such Charters to be accorded so high a profile.

He said the Charter should be viewed against the background of the many positive transformation dynamics that were already in progress Thus:

* The intake at South African universities showed that whites were no longer the majority of prospective CAs(SA). "Indeed, the rate of prospective African CAs(SA) is climbing steeply."

* Thuthuka, SAICA's imaginative transformation initiative, had played, and continues to play, a vital role in accelerating the number of African CAs(SA).

* More females than males were passing the qualifying examination.

* The pipeline was looking increasingly transformed, with each race group moving identifiably toward reflecting the nation's demographics.

Sehoole was confident that the CA Charter would accelerate these "encouraging" trends. "The scorecard is talking to our profession. We are on an exciting journey toward effective transformation."

The Charter's primary focus is specific to areas not covered by other industry charters, since the CA(SA) profession comprises numerous member constituencies employed throughout the economy, either as owners or employees.

The Negotiating Forum and its successor, the 12-member Charter Council, will apply the Charter from 2007 to the end of 2016. It will base its operations on nine key guiding principles.

The independent part-time Council will receive secretarial and administrative support from SAICA to keep running costs, borne by SAICA, at a minimum.

To qualify as a Qualifying Small Enterprises in terms of the Charter, an enterprise's annual revenue must be between R5 million and R35 million. If the number exceeds R35 million, the sector Scorecard applies.

A micro enterprise, one with an annual turnover of less than R5 million, is deemed to have a level four B-BBEE status with a B-BBEE procurement recognition of 100%.

Seven key elements form the pillars to broad-based BEE:

* Ownership

* Management control

* Employment equity

* Skills development

* Preferential procurement

* Enterprise development

* Socio-economic development

The CA Charter will apply the same weightings, "with a minimum of deviation", to these elements as are contained in the state's Code of Good Practice.

The Forum, having identified challenges and future outcomes, has highlighted several specific activities designed to "effect the transition from the current situation to the desired future situation".

These should be viewed against the background of the Charter's primary aim of establishing a structure that reflects South Africa's demographics, and a secondary aim of enabling compliance with the BEE Codes of Good Practice targets.

The CA Charter sets out which activities should be undertaken by SAICA and which by the CA sector. These consolidated efforts should result in achieving the Charter's stated objectives."

SIGNATORY COMMENTS

Cheryl James, Fasset CEO

Fasset, which has been committed to the Charter process from the outset, congratulates all participants for finalising the Charter, which will facilitate change and transformation in the profession going forward.