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- Volume 1, Issue 2, 2007
Journal of Economic and Financial Sciences - Volume 1, Issue 2, 2007
Volume 1, Issue 2, 2007
Author Ben MarxSource: Journal of Economic and Financial Sciences 1, pp 105 –122 (2007)More Less
South Africa boasts a vibrant higher education sector, with more than a million students enrolled in its higher education institutions. These institutions constitute highly complex organisations, with many and varied stakeholders and with budgets running into hundreds of millions of rands. Sound management and strict adherence to corporate governance principles and practices are essential to the success of these institutions. This will include the establishment of a well-balanced, independent and diligent council, as well as properly constituted and effective sub-committees of council. Of these sub-committees, the audit and finance committees are sure to play a pivotal part in ensuring financial discipline and adherence to sound corporate governance principles and practices. The principal aim of this paper will be to focus on the basic governance-regulatory requirements of higher education institutions in South Africa, and to benchmark these requirements against the corporate governance principles and practices required by King II.
Author Daniel CoetseeSource: Journal of Economic and Financial Sciences 1, pp 123 –140 (2007)More Less
This article adds value to the accounting debate on the different methodologies of accounting for financial and non-financial contracts in the current and proposed new accounting pronouncements of the IASB. The paper demonstrates that significant differences exist between the recognition and measurements of non-financial contracts in terms of the traditional accrual basis of accounting and financial contracts in terms of the so-called contractual basis of accounting applied for financial instruments, even though the accounting for financial instruments is seen as an extension of the traditional accrual basis of accounting. The current IASB's projects on liabilities, revenue recognition and the conceptual framework seem to eliminate certain differences between the two methodologies, but also raise new issues on the debate of the methodologies to account for financial and non-financial contracts.
Author H. Alexander SchiebelSource: Journal of Economic and Financial Sciences 1, pp 141 –170 (2007)More Less
It seems logical to assume that GAAP aimed at informing investors show a higher association with share prices (value relevance) than GAAP aimed at protecting creditors. The majority of empirical studies support this assumption. This paper examines the value relevance of IFRS and German GAAP. Regression analyses are applied to companies listed on the Frankfurt Stock Exchange and publishing exclusively either IFRS or German GAAP consolidated financial reports over the period 2000-2004. As a result of Regulation (EC) No 1606/2002, comparative research becomes impossible after 2004: German GAAP will no longer exist on European stock exchanges. The paper's study is restricted to a single capital market in order to eliminate pricing differences between capital markets based in different countries that have already been done in earlier research. Improved circumstances for investigating value relevance compared with earlier research are, however, the selection criteria for the listed companies (emphasis on international transparency requirements, free float and free float market capitalisation) and the share prices used (average price around the end of the business year when the financial reporting data is not yet published). The results of the study show that German GAAP is statistically more value relevant than IFRS. These results have to be interpreted in the light of the selection criteria. It is an unexpected outcome calling for further research.
Source: Journal of Economic and Financial Sciences 1, pp 171 –184 (2007)More Less
The decision to accept an appointment as registered external auditor to an audit client (the engagement decision) has in recent years been subject to an increased level of professional care and consideration, mainly as a result of previous experiences of engagement decisions that have led to audit practitioners suffering significant financial losses and litigation exposure, as well as significant amendments to statutory regulation and new International Standards on Auditing. The engagement decision is affected by a number of factors or motivational drivers. The purpose of this article is to discuss some of these factors related to the audit practitioner's business that may be grouped together under the headings of commercial, professional and organisational considerations. The article further reports on the extent to which auditors in medium audit practice in South Africa considers the three groups of considerations during the engagement decision, based on questionnaire results. Lastly, the article comments on the need for a balanced approach to the three groups of considerations to manage the auditor's business risk associated with the engagement decision.
Author Heli HookanaSource: Journal of Economic and Financial Sciences 1, pp 185 –204 (2007)More Less
This article builds on the notion that, in order to meet the increasing management requirement for data, successful in-house accountancy professionals are internalising ever more capabilities and responsibilities, thereby reflecting a partnership role in professions related to basic operations. The study investigates the organisational interfaces of the accountancy profession vis-à-vis other professions during the change process. The findings identify some possible factors contributing to the traditional way of producing and utilising accounting information, and suggest some possible measures to be used as key facilitators in starting a change process aimed at securing an enlarged, more customer-oriented and highly interactive role for accountancy. The contribution of the study lies in increasing our understanding of surplus-value-producing inter-professional development processes. In addition, based on the case of rescue services the study provides a holistic view on accountancy knowledge management in public-sector services provided in inter-municipal cooperation.