Corruption has infected every sector of South African society.
It violates human rights, lowers the standard of living for citizens, and undermines trust and confidence in the public sector. Corruption discourages foreign investment, stifles economic growth, and reinforces inequality, poverty, and unemployment. It is widespread because there are no deterrents or consequences, and there is a lack of accountability, transparency, and ethical leadership.
To some extent, the finance sector has facilitated corruption by engaging in fraudulent financial reporting, publishing false or misleading information in financial statements, and diverting funds away from legitimate projects and into the bank accounts of nefarious individuals.
But accountants are well-positioned within businesses and the public sector and have the necessary skill sets to lead the economic recovery.
As we recognise International Accounting Day on 11 November, and as the industry comes together under the theme ‘Building Trust Enabling Sustainability’ at the 21st World Congress of Accountants later this month, we need to keep in mind the important role the accountancy profession plays as protector of public Interest and how the profession can help to enable sustainable economies for the future.
Accountants as changemakers
“The Accounting Officer is the most important figure in South Africa’s system of accountability for the use of public funds.”
This was the word from President Cyril Ramaphosa, speaking earlier this month on the government’s response to state capture.
And, speaking at the Finance Indaba 2022, Tsakani Maluleke, Auditor-General of South Africa (AGSA), said: “Our role as finance professionals is to directly influence the lives of people, institutions, nations, and the future. This comes with huge responsibility, and we dare not excuse ourselves from showing up less than who and what we represent.”
According to Maluleke, accountants have chosen a profession that leaves no room for selfishness, complacency, or mediocrity. “A country’s chartered accountants are responsible for its economic health and fighting corruption by promoting transparency and efficiency. This responsibility demands that we be above reproach in our conduct, be it in our roles as leaders, or simple conscientious citizens of this young democracy.”
She went on to say that good governance and leadership are critical for ensuring economic sustainability and changing the lived experiences of every South African citizen.
“We must acknowledge that mismanagement of funds, corruption, and nefarious activities will not take place or be prevalent if accountants are visible, alert, and do the right thing to protect institutions, companies, and the country. We should be ready to do better.”
6 ways accountants can change the narrative
With that in mind, here are six ways accountants can help create and sustain the investment climate needed for increased productivity and economic development, as well as actions you can take right now to lead the change.
Set an example
Accountants should act with integrity, objectivity, professional competence, due care, and confidentiality, says Maluleke.
Accountants must accept their responsibility to be accountable and ethical through an unwavering commitment to the values and standards they uphold in order to change the narrative of being an enabling force for corruption.
Lead the change: Volunteer to lead an ethics or anti-corruption compliance programme or committee within your organisation and create systems and processes that allow whistleblowers to report wrongdoing safely and anonymously without fear of retaliation. Speak out against noncompliance and misconduct and advocate for a strong ethical culture and behaviour in the workplace. Adopt the International Code of Ethics for Professional Accountants and encourage everyone on your team to do the same.
Advocate for data integrity and access to information
Accountants play an essential role in all aspects of governance, from informing decisions, assessing investments, and designing internal controls to measuring performance, reporting, and providing assurance for a company’s data.
Making processes digital enhances transparency, accessibility, and business efficiency. It also improves access to information, which is essential for economic development, democracy, and equality.
Lead the change: Advocate for the digital transformation of your organisation’s processes and systems to ensure that the data captured is accurate and can be used to inform decision-making. You can also contribute to the development of data governance standards and frameworks, report on performance in an integrated manner, and track transformative progress.
Help businesses make sense of ESG and sustainability
Achieving sustainability entails taking a broader view of value creation by fully integrating Environmental, Social, and Governance (ESG) factors with financial performance and driving long-term improvements through an ESG framework.
By assisting businesses in shifting towards more sustainable practices, you can transform how they operate and help leaders make the best decisions for people, the planet, and profitability.
Lead the change: Encourage companies to incorporate ESG considerations into their decision-making processes. Assist them in defining the ESG criteria that are relevant to their operations and purpose, then help them to prepare their systems, gather and report on their data, and adopt the most relevant ESG reporting frameworks to suit their ESG goals.
Global standards for ESG reporting are starting to take shape. Our e-book, A guide to telling your ESG story, explains what ESG is, why it’s important, and how you can organise and present your ESG information through a compelling, impactful story.
Step into the role of Chief Value Officer
Business leaders increasingly value accountants for their strategic and advisory roles, particularly in obtaining financing, making strategic investment decisions, improving business information systems, and adapting to changing regulations.
Lead the change: As an independent consultant, you can offer an expert opinion on the processes used to collect and analyse data, as well as assurance on the information presented in reports. In this way, you guarantee independence, objectivity, and competence, which brings peace of mind to shareholders and stakeholders.
Exercise moral courage
Accountants face several ethical dilemmas, including misleading reporting, fraud, tax evasion, lack of transparency in accounting decisions, bribery, cover-ups of accounting errors, misuse of funds, and insider trading, to name a few.
They might also come under pressure from clients, employers, and other stakeholders to make unethical decisions. But if Chief Justice Raymond Zondo’s proposal to make failure to prevent corruption a criminal offence becomes law, accountants cannot afford to bow to pressure.
Since they could be personally liable for financial irregularities, accountants must maintain an unshakeable commitment to ethical behaviour and act in the public interest.
Lead the change: To avoid conflicts of interest, always use professional judgement and perform your duties with competence and diligence. Be aware of issues and risks and report them in writing to management. Challenge questionable procurement processes, hold people accountable, and ensure that adopted standards are followed.
Reliable and accurate information, transparent records and processes, and credible disclosures are the foundations of good business decisions. The auditor-general has acknowledged the role of technology in strengthening the auditing system, stating that strong IT controls and good governance ensure information confidentiality, integrity, and availability.
Lead the change: Advocate for a cloud-based solution that automates the majority of financial management controls and allows you to monitor financial data in real-time. With technology handling most of the transactional and data-capturing tasks, you’ll have more time to advise and educate business leaders on the importance of sustainability and how to achieve it.
As we transition to a post-COVID world, the world faces a number of geopolitical and global economic challenges. Accountants, as trusted advisors, play a critical role in providing support and assistance to businesses and leading the economic recovery effort. This recovery effort will only be successful if we enable long-term sustainability. And sustainability is only possible if we act ethically and consciously.