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- Meditari : Research Journal of the School of Accounting Sciences
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- Volume 14, Issue 1, 2006
Meditari : Research Journal of the School of Accounting Sciences - Volume 14, Issue 1, 2006
Volume 14, Issue 1, 2006
Source: Meditari : Research Journal of the School of Accounting Sciences 14, pp 1 –13 (2006)More Less
It is internationally acknowledged that small and medium enterprises (SMEs) play a vital role in enhancing a country's economic growth and in creating jobs. It is therefore in the public interest and in the interests of all governments to support SMEs.
A study concentrating on the tax function in small and medium manufacturing concerns operating in the Gauteng Province in South Africa was recently undertaken. In this article, which is based on the study, the authors identify the main problem areas that manufacturing SMEs in the Gauteng Province have to cope with in administering government taxes. The article discusses the administration process only, and not the taxes themselves.
The authors have identified tax compliance requirements in South Africa as a stumbling block for SMEs. They suggest that the government seriously consider reducing the number of taxes SMEs have to administer, reduce the compliance requirements and make additional tools available to SMEs to assist them in administering taxes.
Source: Meditari : Research Journal of the School of Accounting Sciences 14, pp 15 –28 (2006)More Less
E-commerce has changed the way in which business is conducted. One instance of this is that it has made the digitisation of products possible. This shift has severe implications for traditional consumption taxes, which were developed under the premise of a physical presence in a tax jurisdiction. A large number of countries in the world that impose Value-Added Tax (VAT) on the supply of goods and services, including South Africa, are affected by this shift. The Organisation for Economic Cooperation and Development (OECD) has suggested a number of principles that should apply to consumption taxes in e-commerce. These principles are intended to provide fiscal climates in which e-commerce can flourish and ensure taxation systems that secure individual countries' tax bases. A comparison between the OECD principles and the rules pertaining to the imposition of VAT in South Africa on the supply of digitised products reveals several discrepancies and uncertainties. A baseline survey among VAT specialists in South Africa, conducted in order to substantiate these findings, confirmed these discrepancies and uncertainties in practice.
Source: Meditari : Research Journal of the School of Accounting Sciences 14, pp 29 –47 (2006)More Less
The Prevention and Combating of Corrupt Activities Act, Act 12 of 2004, was instituted to curb corrupt activities. It imposes a duty on people in positions of authority to report corrupt or suspected corrupt activities and related activities. However, auditors are not listed in this Act as persons in a position of authority.
This article discusses whether, despite the fact that the Prevention and Combating of Corrupt Activities Act does not place such a reporting duty on an auditor, auditors nevertheless have a duty in terms of other legislation to report any unlawful activities that they uncover in the course of their work, or which they suspect to have been committed. The article also examines whether auditors are required to consider the risk of corruption.
Source: Meditari : Research Journal of the School of Accounting Sciences 14, pp 49 –67 (2006)More Less
The vast global unit trust / mutual fund industry was worth more than $16 trillion by the end of June 2005. Over time, investors' interests seem to have shifted from individual shares to share funds. The unit trust industry in South Africa is no exception. Over the 40-year period from its inception in 1965 to 2005, the industry has grown from only one fund to 567 different funds, worth more than R345 billion.
This study highlights some of the most important changes that have occurred in the South African unit trust industry over the last 40 years. These shifts are compared to changes that the USA mutual fund industry has experienced in the 60 years of its existence. An attempt is then made to answer the question whether South African investors are better off with these changes or not.
Source: Meditari : Research Journal of the School of Accounting Sciences 14, pp 69 –80 (2006)More Less
This article investigates the sources of financial information used for decisions regarding the buying, holding and selling of ordinary shares. The results of this questionnaire-based study indicate that the main source of information used by those who prepare annual reports is stockbroker advice, whereas users of such reports prefer communication with management. Preparers of annual reports support the notion that annual reports are a useful source of information, but users prefer the preliminary announcement. Preparers read the income statement more thoroughly, while users read the cash flow statement more thoroughly. The article also provides information on the qualitative criteria used for assessing the usefulness of accounting practices, and some comments on the importance of setting standards and the objectives of the South African Statements of Generally Accepted Accounting Practice.
Die inkomste- en kapitaalwinsbelastinghantering van kollektiewe beleggingskemas in effekte en kollektiewe beleggingskemas in eiendom : 'n kritiese beskouingSource: Meditari : Research Journal of the School of Accounting Sciences 14, pp 81 –102 (2006)More Less
Collective Investment Schemes in Securities ('CISS') and Collective Investment Schemes in Property ('CISP') are common business vehicles in the South African economy. Nevertheless, there is still some uncertainty with regard to the tax treatment of these business structures, as the application of the specific income tax and capital gains tax provisions applicable to CISS and CISP results in several anomalies. The purpose of this article is to identify and highlight these anomalies by discussing the specific income tax and capital gains tax provisions applicable to CISS and CISP, and to suggest how some of these anomalies should be treated for tax purposes. It is submitted that the legislator did not consider the legal nature and practical operation of a CISS when the tax provisions for CISS were drafted. The tax treatment of CISP is also not without difficulties, especially where the CISP is constituted as an open-ended investment company ('OEIC').
Recognising an STC liability versus recognising a deferred tax asset for unused STC credits according to the IASB framework : a comparisonSource: Meditari : Research Journal of the School of Accounting Sciences 14, pp 103 –120 (2006)More Less
South African companies have, in the past, not recognised an asset for unused Secondary Tax on Companies ("STC") credits. AC 501, Accounting for "Secondary Tax on Companies (STC)", which is effective for annual periods beginning on or after 1 January 2004, now requires South African companies to recognise a deferred tax asset for unused STC credits, to the extent that it is probable that an entity will declare dividends of its own, against which the unused STC credits can be utilised. In terms of AC 501 and IAS 12 (AC 102), Income Taxes (the local and international accounting standard on income taxes), the recognition of a liability to pay STC has to be postponed until the declaration of a dividend. Some accounting commentators have indicated that they find it anomalous to recognise a deferred tax asset in respect of unused STC credits, while no liability is recognised for the STC that would be payable on the future distribution of retained earnings.
The objective of the study is to consider whether it is conceptually anomalous to recognise a deferred tax asset for unused STC credits while no liability is raised for the STC that would become payable on future dividend declarations on profits already recognised in the financial statements.
The study concludes that it is conceptually anomalous to recognise a deferred tax asset for unused STC credits when no corresponding liability is raised.
Author A. WestSource: Meditari : Research Journal of the School of Accounting Sciences 14, pp 121 –137 (2006)More Less
The South African designation of Chartered Accountant is comparable to similar designations in most developed countries. However, the research outputs of Accountancy academics in South Africa seem to lag far behind those of their counterparts abroad. This article discusses the results of several inquiries into the status of South African Accounting research in a global context, and identifies several reasons and possible remedies for low research output.