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Johannesburg, Thursday 31 May 2012 - South Africa's Chartered Accountancy CA(SA) profession is building encouraging momentum in its quest to transform its ownership and management structure.

Tsakani Maluleke chairperson of the CA Charter Council, in a progress report released to the Minister of Trade and Industry and the B-bBEE Advisory Council, stated that the CA profession was "out of the starting blocks" and well on its way towards achieving the CA Charter's long term objectives.

At the same time, she cautioned that "there is no magic wand"; that "change comes with continuous and consistent effort and never taking one's eye off the ball".

With a view to improving the response rate, the Council was involved in discussions with the Independent Regulatory Board for Auditors (IRBA). "We hope to make the issuing of a practicing certificate to firms contingent upon them reporting in terms of the CA Charter," said Maluleke.

She emphasises that the Charter's primary focus is on skills development, in order to increase the pipeline of black chartered accountants in an economy that is desperately in need of more chartered accountants.

Underlining the Charter's strong focus on growing numbers of black CAs(SA), Maluleke maintained that without enough CAs(SA), organisations would struggle to allocate resources for vital services and ensure that they are used wisely. "For businesses to prosper and investors to support them, they need highly qualified accountants, auditors and skilled financial managers."

CAs(SA) play a vital role in measuring and creating value in the organisations they serve as accountants, auditors, business advisors, operations and financial management, and business leaders. Currently, CAs(SA) head-up 32% of listed companies in South Africa and most of the 4000 plus registered auditors in the country are CAs(SA).

Overview of the industry's performance

Firms with more than R35m turnover (Level 3)

Element	Achieved (score)	Possible
Ownership	14.34	20.00
Management	9.63	10.00
Employment Equity	14.04	20.00
Skills Development	16.49	20.00
Procurement	9.26	10.00
Enterprise Development	15.00	15.00
Socio-Economic Development	5.00	5.00
Total	83.76	100.00

 Firms with R5m – R35m Turnover (Level 1)

Element	Achieved (score)	Possible
Ownership	12.97	25.00
Management	15.54	25.00
Employment Equity	22.44	25.00
Skills Development	25.00	25.00
Procurement	25.00	25.00
Enterprise Development	25.00	25.00
Socio-Economic Development	25.00	25.00
Total	150.95	175.00

Black firms (Level 1)

Element	Achieved (score)	Possible
Ownership	28.00 (3 Bonus points)	25.00
Management	27.00 (2 Bonus points)	25.00
Employment Equity	25.00	25.00
Skills Development	25.00	25.00
Procurement	25.00	25.00
Enterprise Development	15.00	25.00
Socio-Economic Development	5.00	25.00
Total	150.00	175.00

Maluleke observes that the profession is generally doing well and is on track in meeting the Charter's 2016 targets. "We are happy with the progress so far, however, there are areas which need immediate attention – precisely increasing capacity and ensuring retention."

"We need to continue investing in bursaries to increase the number of Black CA(SA) in the pipeline, at the same time, we need to increase the capacity of training platforms," she adds, explaining that there is a need to increase the number of accredited universities.

Further, Maluleke states although the transformation initiatives implemented by the profession have begun to show results in increasing numbers of black CAs(SA) qualifying, the long qualification process, coupled with the fact that the majority of newly-qualified black CAs(SA) choose not to remain in the practicing part of the profession, remains an issue of concern."

Chantyl Mulder, SAICA's senior executive, transformation, said that the profession's initiatives to increase the number of Black CA(SA) are beginning to bear fruit. This is evidenced from the number of Black and Coloured candidates who write and pass the profession's Qualifying Examinations (QE exams).

For instance, in 2002 a total of 2 974 candidates entered for Part 1 of the QEI Examination of which 412 (13%) were African, and 145 (5%) were Coloured. In 2011, a total of 3 110 candidates entered for Part I of the QEI of which 748 (24%) were African, and 198 (6%) Coloured. "This growth can be directly attributed to the various initiatives put in place to transform the profession. This is the impressive pipeline to which Maluleke refers," avers Mulder.

One of SAICA's primary goals is to strengthen the country's economy by playing a significant and leading role in transformation and skills development. It's skills development initiative Thuthuka Bursary Fund (TBF), which started in 2005 with 120 students, had as many as 783 undergraduates TBF students at various levels at the end of 2011.

Editor's note

The scores outlined above are the generic scores achieved. To view the scores for large, medium or small firms, see the attached comprehensive report.

Additional highlights:

• Representation of black people at executive board level to reverse the trend whereby companies hire black people only as non-executive directors;
• Involvement of black people in daily operations and strategic decision-making at the most senior level; and
• Representation of black people in core operational roles.
• The profession had performed well against the generic management scorecard criteria, having scored 9,63 out of a possible 10 points overall.

Other yardsticks comprised:

• employment equity, to address representation of black employees and black employees with disabilities; 
• skills development, to develop the competence of black employees;
• preferential procurement, to measure the extent to which the CA sector buys from organizations with strong B-bBEE economic procurement recognition levels;
• enterprise development, to measure initiatives that accelerate the development and sustainability of other, more specifically, black-owned entities; and
• social-economic development, to measure initiatives that promote access to the economy for black people.

TBF success stories:

• A total of 1 131 fully-funded students were at TBF partner universities studying toward qualifying as chartered accountants;
• Of the 1 131, 802 were undergraduates and 229 were studying at honours level;
• TBF students were involved in projects that encouraged learners from their communities to pursue core mathematics as a matric subject;
• In 2009, the TBF first qualifying exam pass rate was a "significant" 89% -- well ahead of the 79% national average; and
• In 2010, the TBF qualifying exam pass rate was 67% -- 16 percentage points high than the national 51% first-time pass rate.

Media Contacts:

Bontle Tsikwe
Communications Coordinator: Corporate
The SA Institute of Chartered Accountants (SAICA)
Tel: 011 621 6712
Email: bontlet@saica.co.za

Nkolola Halwindi
Project Director: Communications
The SA Institute of Chartered Accountants (SAICA)
Tel: 011 621 6713
Email:NkololaH@saica.co.za

About the CA Charter

The vision of the Chartered Accountancy (CA) Sector Code:
To grow the number of Black people in the CA profession to reflect the country's population demographics, to empower and enable them to meaningfully participate in and sustain the growth of the economy, thereby advancing equal opportunity and equitable income distribution

The scope of the Sector Code is broad-based black economic empowerment (B-bBEE) for the Chartered Accountancy CA(SA) profession and sector. Employers and education institutions are only included in the scope of the Sector Code to the extent that they employ SAICA trainees or members of SAICA or offer accredited SAICA education and training programmes leading to the designation CA(SA)

While the Sector Code's primary objective is the transformation of the CA profession and sector, for practical purposes all staff, partners and directors employed by firms in public practice are included in the ambit of this Sector Code.

The scope of this Sector Code is the CA profession only. In developing a Sector Code (and scorecard) for the CA profession it was recognised that the primary focus should be on skills development aimed at increasing the number of black (especially black women) CA s (SA) in South Africa.

The CA Charter Council was established as an independent body with a mandate to oversee the implementation of the charter. Its key tasks include providing guidance on sector specific matters affecting BEE, compile reports on the status of the B-bBEE, share information with the national monitoring mechanism and accredited agencies.

Other tasks for the Council include those of ensuring on-going monitoring of the pipeline of undergraduates and trainees, as well as on-going monitoring of the achievement of targets as set out in the scorecard.