THE SOUTHERN AFRICAN JOURNAL OF ACCOUNTABILITY AND AUDITING RESEARCH

 

The Southern African Journal of Accountability and Accounting Research is the official scientific research journal of the Southern African Institute of Government Auditors (SAIGA). As a fully independent refereed publication, supported by an international Editorial Board, on the South African Department of Education’s list of accredited journals, it aims to advance scholarly research and debate into accountability and auditing related topics. The journal supports the endeavours of the Public Finance Management Academy which was founded by SAIGA to provide for amongst others high quality education in topics related to public finance management, and accountability. With this scientific journal it is intended to provide the widest possible coverage of the issues that are subject to scholarly debate around accountability and auditing. The topics and debate should consequently be directed at accountability, albeit in a very broad context. Preference will be given to contributions that address accountability elements and topics directly.

 

 


Publisher: The Southern African Institute of Government Auditors (SAIGA)


Frequency: Annually


Coverage: Vol 1 1998 – Current


Accreditation(s):  Department of Higher Education and Training (DHET)


Language: English/Afrikaans


Journal Status: Active


Note: The full volumes can be downloaded from  SABINET


Volume 18, Issue 1, January 2016

 

FEATURED ARTICLES

Evaluate the effectivity of a newly developed audit simulation to improve the perceived broad competence of audit students

Author: R. De Villiers

 

Affiliations: 1 North West University

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 1 – 16

Keyword(s): Audit education, Audit simulation, Audit student and Broad competence

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Audit education is in need of change with regard to the teaching methodologies utilized at universities including other institutions of higher learning, both locally and globally. This need is evident by the robust volume of research highlighting the current criticisms against audit education in the form of the out-dated teaching methods employed by audit lecturers. These methods include a passive learning approach. Moreover, the fact that the teaching is concept-oriented, often results in students’ having difficulty in understanding audit concepts through the lack of a clearly developed and adequate frame of reference. This study forms part of a bigger project, in that an audit simulation was developed to meet these needs. The objective was to evaluate whether the newly developed audit simulation would assist to enhance audit students’ perceived broad competence, and to draw conclusions as well as suggest recommendations on the use thereof in the audit classroom in light of the current criticisms. The research approach included the classic quasi-experimental (pre-test/post-test) design to reach the objective of the study and a group-administered questionnaire to collect data from the respondents. The results of the pre-test/post-test evaluation revealed that change is needed of the manner in which auditing is taught at universities and other institutions of higher learning. Furthermore, it was found that by adopting teaching methodologies such as this newly developed audit simulation, positive change can be brought to the audit education environment. Certain areas for further research and development were also identified together with recommendations on the use of simulation in the audit classroom.

 

Audit committees' communication on internal audit to boards of directors

Author: K. Barac and G. Williams

 

Affiliations: 1 University of Pretoria and 2 University of Pretoria

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 17 – 34

Keyword(s): Audit committees, Board of directors, Chairperson of the audit committee, Communication, Communication process, Effective communication, Internal audit, Internal audit function, Mining and South Africa

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Audit committees are expected to communicate effectively as trusted relationships are created when high quality communication takes place. Very little research has been performed on communication between audit committees and boards of directors and no studies have been performed on audit committees’ communication of internal audit information to boards of directors. In closing the gap this article examines the effectiveness of the process of communicating internal audit information between the audit committee and the board, and is useful as previous audit committee studies focussed predominantly on the diligence, resources, authority, and composition of the audit committee and not on the actual process of communication. A case study of three JSE listed mining companies operating in the South African gold, platinum, coal and energy sectors was performed to understand whether communication processes between their audit committees and boards of directors were effective. This involved understanding the views of the chairpersons of the audit committee and board, non-executive directors and chief audit executives for the three companies concerned, because these parties are important role players in communicating internal audit information between their corresponding committees. The findings of the study identified strengths and weaknesses of internal audit information to be communicated and considered the communication process. Barriers, such as board dynamics, culture and language, and the conduct of members were identified. The study showed the importance of the role of the chairperson of the audit committee to promote effective communication and to fulfill such a role, identified attributes are needed.

 

An analysis of the prevalence of proper password practices among South African employees

Author: R. Butler

 

Affiliations: 1 Stellenbosch University

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 35 – 47

Keyword(s): Computer security, Passwords, Passwords performance and User behaviour

Accreditation: Department of Higher Education and Training (DHET)

Abstract: When proper password practices are not applied by employees, it could pose a threat to the confidentiality, integrity and availability of an organisation’s information. This study adopted a survey design to determine the password behaviour of South African computer users who access the internet from their place of employment. Based on the survey results, guidelines for proper password practices and the factors that influence password behaviour, the underlying reasons for poor password performance were investigated. It was found that South African employees’ poor password performance can be attributed to a lack of knowledge of proper password practices and motivation to behave securely; an inability to convert knowledge into practice; and an overestimation of knowledge or abilities concerning passwords. These deficiencies in password security should be addressed through appropriate education and awareness programs. This will empower employees, reduce password vulnerability and improve IT-governance within the South African context.

 

Blowing the whistle for personal gain in the Republic of South Africa : an option for consideration in the fight against fraud?

Author: S. Lubisi and H. Bezuidenhout

 

Affiliations: 1 University of Pretoria and 2 University of Pretoria

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 49 – 62

Keyword(s): False Claims Act, Fraud risk management, Protected Disclosures Act 26 of 2000, Whistleblower rewards and Whistleblowing

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Financially rewarding whistleblowers for information that has led to recovery of fraud losses suffered by government is common practice under the United States of America’s False Claims Act of 1986. However, a whistleblower in the Republic of South Africa is not afforded similar treatment in terms of section 9(1)(b) of the Protected Disclosures Act (26 of 2000) of the Republic of South Africa. In certain circumstances, whistleblowers may not even be protected against occupational detriment resulting from the disclosure. Similar principles of the Protected Disclosures Act in terms of rewarding whistleblowers also apply in the United Kingdom. The objective of this article is to establish whether rewarding whistleblowers should be considered in the fight against fraud in the Republic of South Africa with a similar view of the United States of America’s False Claims Act. In order to address the research objective, the adopted methodology can be described as a conceptual review of whistleblowing policies and regulations in the public sector, specifically focusing on rewarding whistleblowers. This article, therefore, evaluates available literature to determine whether the Republic of South Africa should consider the False Claims Act route by reviewing its legal position, United States of America and the United Kingdom. It further considers whistleblowing as a fraud risk management tool and raises the question whether the current legal obligations on public officials to report fraud are effective in curbing it.

 

The development of an integrated IT risk assessment questionnaire for internal auditors' use

Author: R. Goosen

 

Affiliations: 1 Stellenbosch University

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 63 – 71

Keyword(s): COBIT 5, COSO, ERM, ISA 27002, ISA 315, ISA 330, ISO 27001, IT Audit, IT Risks and ITIL V3

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Most businesses today operate in a complex Information Technology (IT) environment. The King III Report,South Africa’s Corporate Governance Framework, holds the board of directors responsible for risk management processes, including IT governance related matters. This responsibility is often delegated to the IT- and risk committees, which in turn are assessed and evaluated by the internal auditor. However, due to ever-changing emerging technology risks and the vague guidance provided by the King III Report, the internal auditor requires assistance to conduct this evaluation. Most of the frameworks recommended by King III Report have only been updated in recent years, thereby changing the focus and risk areas internal auditors should evaluate. This article proposes to develop an integrated IT risk assessment questionnaire based on certain updated IT and risk control frameworks to assist the internal auditor in evaluating high level IT control risk areas in an effective manner, whilst complying with the latest framework requirements and also taking emerging technology risks into consideration.

 

Risks associated with corporate social media communication - time for internal auditing to step-up

Author: S.C. Green

 

Affiliations: 1 University of Pretoria

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 73 – 91

Keyword(s): Corporate social media communication, Internal auditing, Mitigation and Risks

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Various case studies highlight the negative effect corporate social media communication risks have on organisations. In this study, the risk associated with corporate social media communication in organisations is investigated. The extent of internal auditing’s involvement to assist management in evaluating and mitigating the risks that such communication poses is also explored. The study revealed that organisations’ brand and reputation is the most important risk. A significant number (33%) of respondents indicated that risk of social media communication were not included in their organization’s internal audit universe. The majority indicated that internal auditing did not evaluate or was not trained to evaluate the effectiveness of corporate social media communication controls. The results of this study revealed that there are opportunities for internal auditing to focus its efforts on becoming involved in evaluating risks relating to corporate social media communication.

 

Risks associated with corporate social media communication - time for internal auditing to step-up

Author: S.C. Green

 

Affiliations: 1 University of Pretoria

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 73 – 91

Keyword(s): Corporate social media communication, Internal auditing, Mitigation and Risks

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Various case studies highlight the negative effect corporate social media communication risks have on organisations. In this study, the risk associated with corporate social media communication in organisations is investigated. The extent of internal auditing’s involvement to assist management in evaluating and mitigating the risks that such communication poses is also explored. The study revealed that organisations’ brand and reputation is the most important risk. A significant number (33%) of respondents indicated that risk of social media communication were not included in their organization’s internal audit universe. The majority indicated that internal auditing did not evaluate or was not trained to evaluate the effectiveness of corporate social media communication controls. The results of this study revealed that there are opportunities for internal auditing to focus its efforts on becoming involved in evaluating risks relating to corporate social media communication.

 

Measuring corporate governance in South Africa : developments, concerns and suggestions

Author: N. Mans-Kemp, P. Erasmus and S. Viviers

 

Affiliations: 1 Stellenbosch University, 2 Stellenbosch University and 3 Stellenbosch University

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 93 – 104

Keyword(s): Accountability, Corporate governance, Disclosure and South Africa

Accreditation: Department of Higher Education and Training (DHET)

Abstract: A large and increasing number of corporate governance guidelines have emerged on the African continent over the last two decades. Limited research has, however, been conducted to comprehensively assess the corporate governance policies and practices of listed African companies. The researchers hence compiled a unique corporate governance database for 230 companies that were listed on the Johannesburg Stock Exchange over a nine year study period. Attention was given to both disclosure and acceptability dimensions for nine corporate governance categories. Positive developments were noted for the director-related categories, while reporting on sustainability and corporate culture aspects showed less improvement. A number of unacceptable practices were also observed. Enhanced training for directors, managers and auditors is recommended to improve their understanding of their roles and responsibilities. Furthermore, the media can encourage more active corporate governance-related dialogue by reporting on inefficiencies and highlighting positive developments.

 

Disclosure of independence-enhancing attributes within the audit committee/ internal audit activity relationship

Author: K. Barac and J.T. Mdzikwa

Affiliations: 1 University of Pretoria and 2 University of Pretoria

Source: Southern African Journal of Accountability and Auditing Research, Volume 18, Issue 1, Jan 2016, p. 105 – 117

Keyword(s): Annual report disclosure, Audit committee, Internal audit activity, Internal auditor independence and Top 40 JSE listed companies

Accreditation: Department of Higher Education and Training (DHET)

Abstract: Independence is a cornerstone of the internal audit profession, hence its prominence in the definition of internal auditing. The quality of the audit committee/internal audit activity relationship is important for the enhancement of the independence of the internal audit activity. Using content analysis, this article examines attributes within the audit committee/internal audit activity relationship. Information disclosed in the annual reports of the Top 40 companies listed on the Johannesburg Stock Exchange on the internal audit activity was used during the content analysis. The findings revealed that most companies did not disclose the selected attributes extensively in their annual reports. Since there are no legislative requirements on the extent to which such disclosures should appear in the annual reports of companies in respect of the internal audit activity, the results of this study can be used by the internal audit standard setters to advance their work in this area.

Submissions can only be done electronically. The submission must be e-mailed to admin@saiga.co.za and addressed to: The Editor, SA Journal of Accountability and Auditing Research.

Authors wishing to submit a manuscript, should carefully adhere to the Editorial Requirements, which can be downloaded on the link below:

Editorial Requirements

Editor: Prof Lourens Erasmus

Associate Professor: Department Public Sector Finance

Convenor: Faculty Teaching Community of Practice

Faculty of Economics and Finance, Tshwane University of Technology

Office: +27 12 382 0566

Mobile: +27 72 622 1054

E-mail: erasmuslj@tut.ac.za

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