The auditing profession is expected to be hit by a tidal wave of changes that are to be introduced in the area of auditor reporting, as well as with other changes relating to the International Standards of Auditing (ISA). These proposed changes are aimed at achieving enhanced communication value; increased attention to specific disclosures; renewed auditor focus and improved audit quality.

 

“The issue of auditor reporting is extremely important as it is the single biggest change proposed by the International Auditing and Assurance Standards Board (IAASB) since the clarified ISAs were introduced in 2009.This is expected to have a huge impact not only on auditors, but investors, analysts and other users of financial statements”, says Ashley Vandiar, project director of Assurance at the South African Institute of Chartered Accountants (SAICA), stating that the proposed changes will be mandatory for listed companies and public interest entities whilst other entities can apply them on a voluntary basis.

 

He advises that this is a very important reminder to all auditors as their level of awareness to the forthcoming changes will determine their ability to sink or swim if the proposed changes in their current state were to become effective.

 

“There is going to be a new standard named the ISA 701 which requires the auditor to report on key audit matters. The existing ISA 700 will also be changed to require the auditor to report on the ethical requirements and the source of those ethical requirements. ISA 260 which deals with reporting to those charged with governance will also be revised to align with the requirements of ISA 701. Other conforming changes will also be made to other ISAs.

 

The proposed new standard will require the auditor to include a selection of issues from the report that was sent to those charged with governance. Accordingly, not all issues reported to those charged with governance will be considered key audit matters. Although the auditor must apply professional judgement in deciding what would constitute key audit matters, the guidance provided in the standard indicates that the following would be considered key audit matters:

• Issues that required significant judgement or posed significant risks
• Issues that posed difficulty in obtaining sufficient appropriate audit evidence
• Circumstances that required significant modification to the planned audit approach

 

The auditor will also need to conclude on the appropriateness of management’s use of the Going Concern assumption. This does not mean that management is providing assurance on the Going Concern ability of the entity but rather, management use thereof and the preparation of the financial statements, for which the auditor does express an opinion that the financial statement is prepared on the correct basis.In terms of the proposed revision of ISA 570, the auditor will also be required to explicitly make astatement that “neither management nor the auditor can guarantee the entity’s ability to continue as a going concern.”

 

Vandiar explains that while reporting on Going Concern in the audit report has been regularly done when the circumstances required it, SAICA is concerned with the fact that an explicit statement to this effect may be misconstrued by those users who are less knowledgeable about what that actually means. The auditor has never in the past guaranteed the Going Concern of the entity for the next 12 months, however, by making a disclaimer in the audit report, users might interpret this to be some form of qualification.

 

Apart from the changes proposed, the entire structure of the report will be changed. “Whereas the current auditor report is standardised and consistent among all auditors, the proposed report does not prescribe the structure of the report. Therefore, while there will be prescribed minimum information that must appear in the report, the placement of these is left up to the discretion of the auditor concerned. As such, the report will differ from one audit firm to another.”

 

While SAICA supports the increased discretion and professional judgement permitted to auditors, Vandiar expresses some concern regarding the potential confusion that may arise by less knowledgeable users of financial statements. “The current standardised report, while fairly straight forward in its form and content, was clearly not fully understood by all users. There are already drastic changes proposed in the audit report and by compounding this with a non-conforming structural format, may cause more confusion.This might actually increase the expectation gap and knowledge gap of what an auditor does and what the market expects from the audit process.”

 

He highlights a further proposed change to move the audit opinion to the top of the report, just above the addressee section. Vandiar explains; “SAICA is in support of this structural proposal as this increases the prominence of the audit opinion which may get lost among other information now required to be included in the report.”

 

The deadline for commenting on the proposed changes is 22 November and Vandiar urges all affected parties to participate by sending their comments through to their professional bodies, which will ensure they submit their input to the IAASB. SAICA will be engaging with its stakeholders and will be submitting comments on their behalf.

Supporting proven programmes can solve the public sector’s skills shortage in five to ten years

Government’s mission is to deliver on its objectives to improve the lives of its citizens. Its greatest challenge, however, is developing the financial management and governance skills to ensure budgets are spent effectively.

As part of its 2013 Budget wish-list, the South African Institute of Chartered Accountants (SAICA) is calling on the National Treasury to simplify the complex tax structure surrounding scholarships and study loans in order to encourage companies to provide bursaries to employees and their relatives.

 

Currently, section 10(1)(q) of the Income Tax Act, No 58 of 1962 provides for the exemption of scholarships or bursaries, but this exemption only applies in certain circumstances when the scholarship or bursary was provided to employees and relatives of employees.

 

If the scholarship or bursary is granted to assist an employee, the exemption will only be available if it is a requirement that the employee reimburses the scholarship or bursary if the employee fails to complete his or her studies, (unless this is due to death, ill health or injury). With respect to a scholarship or bursary granted to a relative of an employee, the exemption will only be available if the remuneration derived by the employee does not exceed R100 000 during the year of assessment and only the first R10 000 of the scholarship or bursary will then be exempt.

 

Piet Nel, SAICA’s Project Director: Tax explains that it is not disputed that South Africa is still experiencing a skills shortage. Many employers provide bursaries and study loans to up-skill and develop employees as well as to assist relatives of employees to study and become skilled.

 

“Employers are often committed to the continuous development of their employees and associated relatives. This contributes to the continued increase in education levels across the nation and should be encouraged by Government in order to reduce the burden on the already over-extended education departments and tertiary institutions.”

 

According to Nel, there are nonetheless a number of challenges that employers face in this area.

1. Monetary amounts

The monetary amounts used in section 10(1)(q) have seen little adjustment for inflation since its introduction in 1992. These amounts do not take the considerable increase in the cost of education over the past eleven years in South Africa into account. The low remuneration value is limiting the availability of the benefit to very few individuals. The employers would provide bursaries but the result for employees will be that they will be taxed on a fringe benefit and therefore they cannot afford this benefit.

 

SAICA proposes that the monetary amounts in section 10(1)(q) should be revised in line with inflationary changes. “One option is to link the remuneration level to the annually changing Basic Conditions of Employment earnings threshold, currently R183 008. Another option would be to link it to the lowest tax bracket currently R160 000. We also call for the National Treasury to consider removing the R10 000 limit in its entirety”, says Nel.

 

2. The concept of “remuneration”

The R100 000 amount in section 10(1)(q) refers to remuneration. The word remuneration is not defined for purposes of the section and must therefore take its normal meaning. It is a very wide definition and will for instance include variable, discretionary and lump-sum payments.

 

Many employers do not have the resources to manage full bursary schemes or to fund payments upfront to institutions or to manage approval processes in time for registration dates to be met. “We suggest that section 10(1)(q) is amended to allow the employer to determine the application of the exemption based on the fact that the employer is satisfied that at the time the award is made, the remuneration of the employee for the year of assessment is not expected to exceed the monetary amount for that year”, Nel explains.

 

SAICA also proposes that remuneration should, for purposes of this exemption, be restricted to the cost, to the employer, and should exclude any lump sum payments, share gains and variable remuneration due to the employee.  

 

3. Method of payment

Section 10(1)(q) does not stipulate the manner in which the scholarship or bursary is to be awarded or funded. The Interpretation note refers to “financial or similar assistance granted to enable a person to study” and then provides some examples of what a bona fide scholarship or bursary would include. It specifically states that “a reward or reimbursement of study expenses ... after completion of studies” will not qualify for the exemption and then deals with study loans.

 

For many employers, the award of scholarships or bursaries is an ad hoc function and the current practice does not provide the employer with flexibility in payment options. “It is proposed that where the true nature of the payment, in whatever form, is for the purpose of enabling an employee or relative of an employee to enable or assist a person to study then the section 10(1)(q) exemption should apply”, says Nel, adding that other mechanisms of funding should therefore be permitted.

 

Nel says National Treasury should be encouraging employers to fund these studies by relaxing the tax laws, as this will ease the burden on the state. “This will assist the National Government to reduce the strain on education needs as well as for future provision of social grants as more individuals will be qualified to earn a living wage.”

With the 2013 budget speech fast approaching, the South African Institute of Chartered Accountants (SAICA) calls for the Minister of finance, Mr Pravin Gordhan, to review certain provisions related to the Value-added Tax Act, No 89 of 1991 (“the VAT Act”) pertaining to companies that have already implemented business rescue proceedings.

The new Tax Administration Act, No. 28 of 2011 (the TAA) comes with new provisions on penalties now in effect.

Retirees are often left destitute by the shenanigans of their pension fund administrators. The good news is that there is legislation in place to protect their life savings and make sure those in charge of their money stay in line.

 

Those sensible enough to have a pension plan would know that nothing is worse than hearing that their pension fund has been mismanaged. Yet it happens all too often, leaving people destitute. Yusuf Dukander, Project Director of Financial Services at the South African Institute of Chartered Accountants (SAICA), says that the requirements for fund administrators have been in place for nearly 20 years but it is only now that more intensive supervision, of late driven by corporate governance imperatives, is being implemented to improve the management reporting structure.

 

“The conditions were introduced in 1992 along with other amendments to the Pension Funds Act,” says Dukander, who points out that the Registrar of the FSB (Financial Services Board) recognised that the many role players within the retirement funds industry needed a coherent regulatory framework.  “The financial services industry had been dogged by the collapse of some pension funds due to poor management”. Accordingly, section 13B of the Pension Funds Act (1956) was designed to create an environment for more frequent and rigorous risk reporting by the administrators.

 

Dukander emphasises that the legislation is intended to ensure that pension fund contributions are properly regulated and managed. It defines what is required from an administrator, which it defines as “any juristic person, other than a trust, who has been approved by the Registrar, as a benefit administrator or an investment administrator”.

 

He cites the example of a stock broker who receives money from a pension fund for investment. As such, he is an administrator and must be approved by the Registrar. However, if the stock broker simply buys or sells assets on the instruction of the trustees of the fund, approval for his role as an administrator is not required.

 

However, he stresses, that does not exempt boards of retirement funds and trustees from acting responsibly.  “The trustees at all times have a fiduciary responsibility. Failure to do that could prompt the Registrar to act on behalf of the members. The Registrar can remove a board and appoint new trustees if it is necessary, without recourse to the High Court.”

 

Dukander welcomes the FSB’s corporate governance for retirement funds guidelines contained in its PF 130, a document that guides boards of trustees on how to comply with good governance principles.  In short, says Dukander, a primary function of the board of trustees is to ensure that it exercise a rigorous oversight function. “Legislation and the FSB guidelines should help achieve this critical function.”

 

Stephan Pretorius, a member of SAICA’s Retirement Funds Project Group mentions “PF 130 states that the fundamental principle is that the board of trustees, elected by the participating employers and employees, at all time acts with the utmost good faith towards the fund and the best interest of all members.”

 

Pretorius explains that the document proposes that through good corporate governance, funds would be able to:

• provide the benefits to its members as set out in the fund’s rules;
• optimise benefits and minimise the associated investment risk;
• ensure that the cost implications involved in providing these benefits and administration services to members are transparent and quantifiable by the stakeholders.

As more companies outsource their administrative functions, Dukander says that consumers are understandably concerned about the possible fraudulent activity.

 

“Importantly in this context, being outsourced does not absolve administrators of their responsibilities. So, if the agreement has the Registrar’s approval and a solid service level agreement exists between the trustees of the fund and the outsourced administrator, consumers can take comfort that their monies invested are relatively secure.”

 

Administrators sign a service level agreement that must contain details such as:

• how contributions and benefits are processed;
• updates on investments and disinvestments;
• the administration of housing loans; and
• financial accounting procedures.

 

Administrators must be registered as financial services providers in terms of the Financial Advisory and Intermediate Services Act (FAIS) and must comply with any other applicable legislation and requirements. The administrator must provide regular certified auditors' reports and quarterly returns, and comply with rules governing the outsourcing of their functions as administrators.

 

Dukander recommends that good governance is holistic approach; that it factors in all facets of the entity.  “For this to be successful, the top management within the pension fund administration must be seen to cultivate a culture and attitude that is ethical and financially responsible. By applying this framework, the management executive – that is the people in charge of the administrator – sets the tone of the organisation regarding the business environment within which the pension funds are controlled.”

 

He advises that administration agreements can be terminated with the permission of the Registrar. The transferring administrator must supply its successor with all the information it has in its possession regarding the fund and related relevant organisation.

 

“The provisions of the pension legislation make it clear that the sanctity of the administration of your pension funds is guarded by law. A pension fund is for the provision of benefits for members and pensioners. To this extent, the role of the trustees and administrators are equally clear.”

1 May 2013 is deadline to update details free of charge

The deadline of 1 May 2013 for incorporated companies to amend their set of articles of association and memorandum of association (articles and memorandum) to a Memorandum Of Incorporation (MOI) free of charge is fast approaching and companies are only left with six months to ensure they meet the deadline.

 

Juanita Steenekamp, Project Director: Governance at the South African Institute of Chartered Accountants (SAICA), confirms that the Companies Act, 2008 (the Act) which became effective on 1 May 2011 introduced a number of changes to the South African business landscape. “One of the most significant changes is that the requirements for incorporated companies were amended and what were previously known as the articles and memorandum, were changed to the new MOI”. 

 

As per the Act, all incorporated companies have to comply with the new law. The transitional provisions provided that for a period of two years after 1 May 2011, a company could amend its MOI free of charge to bring it in line with the requirements of the Act.

 

Steenekamp observes that there seems to be uncertainty from companies on the implications of them not amending their articles and memorandum. “During the 24 months, from 1 May 2011 to 1 May 2013, the old articles and memorandum remain in effect for companies unless there are specific transitional provisions that override the articles and memorandum of association.”

 

“After the 24 months period (from 1 May 2013), the previous articles and memorandum will continue as the MOI of the company. If there is any requirement in the articles and memorandum that is in conflict with the Act, then those requirements will automatically be void from 1 May 2013,” Steenekamp confirms.

 

The transitional provisions are captured in Schedule 5 of the Act and include requirements such as the duties, conduct and liabilities of directors as well as approval of financial assistance or distributions. “It is imperative that companies are aware that the requirements set out in Schedule 5 therefore apply to companies with effect from 1 May 2011, even if the articles and memorandum had stated any other requirements”, Steenekamp advises.

 

It is the responsibility of companies to review their memorandum and articles and identify any possible conflicting provisions. The decision to amend the articles and memorandum is ultimately the company’s and should be based on the review of the company documents.

 

An example that companies need to consider is the fact that the current articles and memorandum require a company to prepare annual financial statements that are required to be audited at the end of each financial year. However, in terms of the Act, not all companies require an audit of their annual financial statements.

 

Companies should therefore take note that this is one of the requirements included in their articles and memorandum that should be adhered to. Although this is not in conflict with the Act, nor a requirement of the Act, it should still be adhered to post 1 May 2013. “It is also important to note that companies can alter their MOIs to impose a higher restriction or more onerous requirements on the company, which it has to adhere to”, says Steenekamp.

 

Steenekamp states that companies should take note that it is not compulsory to amend their articles and memorandum which will now be known as the MOI, but it would be a prudent business decision to review the current articles and memorandum requirements in line with the requirements of the new Act and to take note that any conflicting provisions, not already included in the transitional provisions, will not be valid after 1 May 2013.

Companies listed on the JSE have faced significant changes in the way they report. The Companies Act has allowed for summarised financial statements to be sent to shareholders, and the listings requirement for integrated reporting (through King III) has resulted in the traditional lengthy annual report being reduced into a concise, understandable report on material connected issues.

 

And the good news for users of company reports – who have faced increasing volumes of financial and non-financial information over the years making it difficult to distil the key information – is that the integrated reports of companies are likely to slim down even further as companies place more of their detailed topic-specific information on their websites with links from their integrated reports.

 

The Integrated Reporting Committee (IRC) of South Africa commissioned a research survey of the 2011 integrated reports of the top 100 companies listed on the JSE. The objective was to examine the status of integrated reporting in South Africa given that most listed companies have produced at least one integrated report with many releasing their second. The research survey was undertaken by the College of Accounting at the University of Cape Town.

 

Professor Mervyn King, the chairman of the IRC, says that the uptake of integrated reporting in South Africa is very encouraging and that South Africa can be proud that it is leading the world in this area. “Integrated reporting is designed to give a better and more holistic view of a company than historical financial statements alone. An integrated report shows the connections and inter-relatedness between a company’s strategy, essential resources and stakeholder relationships, risks and opportunities, performance and its future outlook.”

 

The research found that 78% of the companies had changed the name of their annual report to ‘integrated report’. Dual listed companies, in general, did not call their reports ‘integrated’, but many included integrated information. Five local companies continued to call their report an annual report.

 

Of the companies that produced an integrated report, 60% included a statement that the report had been endorsed by the board, although in many cases this endorsement should have been given more prominence in the report given its importance.

 

The research found that most companies (82%) have not yet availed themselves of the Companies Act concession to publish summarised financial statements, opting to include the full annual financial statements in their reports. This is expected to change, though, as some companies have been held back by the necessity to change their founding documents to allow for summarised financial statements.

 

There is a wide range in the length of the reports. The longest was 456 pages and the shortest was just 46 pages, with the average being 179 pages. The average length of the reports of the 18 companies that included summarised financial information was much shorter at 124 pages. The length of the summarised financial statements ranged from one page (both Kumba Iron Ore and AngloGold Ashanti) to 34 pages (Imperial Holdings) with the average length being 11 pages. This should be compared to the average length of 70 pages for the full annual financial statements.

 

40% of companies make reference in their integrated reports to the availability of detailed sustainability information that can be found either in a separate publication or online. This approach goes some way to achieving the desired conciseness of an integrated report. An area that is crucial to achieving a concise report is the company’s determination of materiality. This aims to ensure that only information important to an assessment of how the company made its money and its ability to sustain value creation is included in the report. These are crucial factors in deciding what information should go into the integrated report or should rather be included in one of the more detailed topic-specific reports. Only eight companies explained their materiality process in their reports.

 

The research found that a wide diversity exists in the nature of the integrated reports. While guidance is available there appears to be some confusion on the shape and format of an integrated report. In January 2011, the IRC issued a discussion paper on a report framework. This paper fed into the discussion paper issued by the International Integrated Reporting Council (IIRC) in September 2011. A final framework is expected from the IIRC in late 2013, with a draft framework being issued early in 2013 which will be open for public comment. The IRC has said that its future local guidance will be in line with that of the IIRC.

The researchers found that while the vast majority of companies switched to calling their reports ‘integrated’, this did not necessarily mean that the report complies with the principles of integrated reporting or that the company practises integrated thinking (connecting financial performance to the key non-financial drivers, for instance natural resources and employee stakeholder relationships, on which the performance depends).

Some of the companies stated in their reports the benefits they had received from integrated reporting, including:

• Santam integrated report 2011

“Integrated reporting has improved our awareness of the opportunities for stakeholder engagement that could benefit the business and contribute to sustainability.” 

 

The research survey made no attempt to evaluate the quality of the 2011 integrated reports issued by the listed companies.

South African Chartered Accountant [CA(SA)] and esteemed businessman, Professor Wiseman Nkuhlu has been appointed as a Trustee of the International Financial Reporting Standards (IFRS) Foundation. The Foundation is a body that is responsible for the governance of the International Accounting Standards Board (IASB) who issue IFRS.

This appointment comes at a time when decisions need to be made on whether the IASB should be pursuing the previous goals of converging IFRS with US GAAP, aimed at having one set of globally recognized standards. This move was pushed for by the G20 after the financial crisis. Given the Securities and Exchange Commission announcement to defer their decision on the use of IFRS for US registrants, the IFRS Foundation needs to re-consider their priorities to serve their IFRS constituents. Professor Nkuhlu represented South Africa on the Financial Crisis Advisory Group when it was set up in December 2008 by the IASB and the US standard-setter - the Financial Accounting Standards Board (FASB). The Advisory Group was set up to advise both boards (IASB and FASB) on financial reporting issues arising from the global financial crisis.

Professor Nkuhlu, who is also South Africa’s first black CA(SA) and has a wealth of experience in the accountancy profession. His illustrious career includes being a former President of the South African Institute of Chartered Accountants (SAICA), and also includes his current role as Chancellor of the University of Pretoria. Among the many other influential roles that Professor Nkuhlu plays in the accounting industry, is that he serves as a director on the boards and audit committees of several public companies.

"SAICA is proud of Professor Nkuhlu’s appointment to the IFRS Foundation. He joins the already significant number of CAs(SA) who occupy influential roles on the global accountancy sphere. From that perspective, this is not only a SAICA achievement but it’s an achievement for the country at large,” said SAICA’s financial reporting project director Sue Ludolph.

Ludolph confirms that this is a prestigious role for one of SAICA’s high calibre CAs(SA). “This appointment serves to further cement and maintain our strong foothold in influencing global strategy and the direction of IFRS”.

She explains that Professor Nkuhlu has a long standing relationship with SAICA, citing that he is currently a member of the SAICA Advisory Board. “He has also played an instrumental role in the transformation space of the accountancy profession in the country and he continues to take a special interest in SAICA’s Thuthuka initiatives”.

In response to his appointment, Professor Nkuhlu says he is very pleased and looks forward to making a contribution to the further development of a single set of high quality global accounting standards that would enhance transparency, consistency and comparability. “As South Africa, and the rest of the continent, is getting more integrated in global capital markets, it has become critical that we become full participants in the development of global accounting standards. One hopes that this appointment will inspire many young accountants from disadvantaged backgrounds who wish to play a more significant role in the profession to realise that there are no limits”.

The appointment of Professor Nkuhlu follows that of Jeff van Rooyen, who is also the current chairperson of the Financial Reporting Standards Council, which is the local accounting standards setting body. "I am truly delighted that Professor Nkhuhlu has been appointed as my successor. We both share a passion for promoting the use of IFRS and IFRS for SMEs in Africa and I look forward to working closely with him in this regard", says van Rooyen.

Van Rooyen will be retiring as a Trustee of the IFRS Foundation on 31 December 2012 and Professor Nkuhlu will take office on 1 January 2013 and his term of office will expire 31 December 2015.

Drives financial results and enhance business performance

 

Events over the last decade have fundamentally shifted the way organisations think about risk.  As a result, companies around the world have made substantial investments in personnel, processes and technology to help mitigate and control business risk. The question does remain as to whether these investments will be able to prevent the next catastrophic event and whether companies are getting a return on their investments and are focusing on the risks that matter according to research conducted by Ernst & Young.

 

Yusuf Dukander, Project Director: Financial Services at the South African Institute of Chartered Accountants (SAICA) believes that the risk management and governance landscape will see an evolution towards better quality oversight by management and supervisory practices embedded in many organisations across diverse industries – worldwide calls for businesses to have more supervisory authority.

 

Lance Tomlinson, Ernst & Young’s Assurance Leader for Africa, says effectively managing risk can enhance a companies’ performance, stating that companies with more mature risk management practices outperform their peers financially. “We found that companies with the most mature or sophisticated risk management practices generated the highest growth in a number of financial ratio’s including revenue, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA to economic value and return on invested capital. The study revealed that sophisticated risk management creates value, mitigates risk and optimises cost.

 

ERM might be viewed by many business owners as a stand-alone governance compliance, however; it should be seen as an integral part of an organisation’s strategy. Companies that effectively embed risk management practices into planning and performance management are more likely to achieve strategic and operational objectives.

 

Tomlinson advises that organisations need to effectively assess risks across the business and drive accountability and ownership. “It is critical for management to demonstrate the organisation’s strength of risk management to investors, business analysts and regulators.”

 

Dukander adds, the concept of risk governance can also be viewed as balancing the needs of all stakeholders with the risks associated inherent in the business. It also prompts management to adopt a culture of more risk reporting in an effort to drive profitability and the sustainability of an organisation well into the future.

 

The Ernst & Young survey, which assessed 137 global institutional investors reveals that 82% respondents were willing to pay a premium for companies that demonstrate successful risk management. Meanwhile, 61% will not invest where there is evidence of poor risk management and 41% would withdraw investment where there is a perceived lack of appropriate risk management.

 

Tomlinson says that for companies to derive financial value from ERM, they need to identify and understand the risks that matter. It is also important for organisations to differentially invest in risks that are mission critical to the company.

 

Dukander proclaims that fear is possibly one of the major driving forces behind the accelerated investment in Governance, Risk Management and Compliance (GRC). “Today, companies operate in a more volatile risk environment than ever before. They face increased demands for more timely and insightful information from stakeholders who will not tolerate risk management failure.”

 

In a survey among companies across Europe, the Middle East, India and Africa, Ernst & Young found that nearly 70% of organizations are highly reliant on their GRC activities as a safeguard against failure. Interestingly, however, this spending and dependency is not matched by the value that business leaders think they currently get from GRC. Over two-thirds of all respondents indicated that more work was needed to enhance their GRC functions.

 

External stakeholders are more dissatisfied with the quality of GRC than companies’ own operational management and business leaders, with 79% or respondents stating that they believe companies’ GRC functions need to be enhanced.

 

Dukander confirms that the principles of GRC and ERM are critical to any business whether it operates locally or internationally. “The practice of ERM is developing locally with the Financial Services Board and the Reserve Bank moving towards this direction. The Financial Services sector has seen ERM form part of regulations such as Basel III and Solvency Assessment Management.”