Chartered accountants lose confidence in governance levels in South Africa

Chartered accountants in South Africa (CAs [SA]) have grown increasingly confident in the last few months regarding the levels of ethics being practiced in their profession; however, this improvement hasn’t translated into their view of the wider economy

The survey of more than 600 CAs(SA) revealed a confidence level of 74% for the second quarter of 2012 when asked whether they are confident that professional ethics still prevail in their profession, up nine percentage points from the previous quarter. Conversely, their confidence in the level of governance applicable in South Africa declined by three percentage points to 47%.

Perceptions about the local economy also took a knock among CAs(SA) with respondents revealing a five percentage point drop in confidence to 49% that South Africa has seen the worst of the global economic turmoil. In addition to this, a confidence level of 60%, down three percentage points from the previous quarter, was recorded by CAs(SA) when asked about their confidence in the economic outlook for the country over the next 12 months.

According to Gerhard Joubert, Head of Group Marketing and Stakeholder Relations at PPS, the financial services provider focused on graduate professionals: “It is worrying to note these declines of confidence in the local economy, especially given the critical role CAs(SA) play in the economic sustainability.”

The survey also revealed a three percentage point decline in confidence quarter on quarter with only 7% of respondents indicating they believe that the current tax incentives offered by the government are sufficient to encourage South Africans to save. Furthermore, 66% said compulsory preservation was necessary to enforce South Africans to save. “National Treasury is set to release a series of discussion papers in the coming months regarding the state of retirement savings in South Africa which will hopefully provide further clarity and revision of current structures to enable an improvement to the overall current lack of a sound savings culture in the country.”

Socio-economic results from the survey revealed that CAs(SA) remain concerned about a number of issues. Their confidence levels in the crime rate improving in South Africa over the next five years dropped by five percentage points from 48% recorded in the first quarter of 2012 to 43% for the second quarter.

CAs(SA)’s confidence in the standard of education in South Africa improving over the next five years also dropped by five percentage points to 43%, while 95% of respondents indicated they were concerned about the lack of mathematics and science graduates, up two percentage points from the previous quarter. Furthermore, 91% of CAs(SA) are worried about the rising cost of tertiary healthcare, an increase of one percentage point.

“It is not surprising that CAs(SA) are concerned about the education system in the country, especially as mathematics is a key subject requirement for the sustainability of the profession as a whole. It is imperative that more is done to promote this vital subject among school children to ensure that the profession - and other professions reliant on this critical subject - can remain intact,” says Joubert.

“The second quarter survey results from CAs(SA) reveal some serious areas of concern for these professionals both within their own profession and the country. It is important to understand and address these concerns in order to ensure the country can attract and retain this vital skills force,” concludes Joubert.

Other results from the survey conducted among CAs(SA):

· Confidence in the sustainability of the CAs(SA) profession remained unchanged at 87%

· Confidence that CAs(SA) are subject to an appropriate taxation regime remained unchanged at 62%

· Confidence in the future of the profession over the next five years remained unchanged at 87%

· 83% of CAs(SA) would encourage their children to enter their profession, down two percentage points

· Confidence in their ability to earn an income that keeps up with inflation was 78%, up one percentage point

· Confidence that they will remain in the country for the foreseeable future was down one percentage point to 76%

· Confidence in whether the state of unemployment will improve over the next five years remained unchanged at 42%