Our history

Our history
Four decades and more of SAICA

Since the founding of the South African Institute of Chartered Accountants (SAICA) in 1980, much has transpired for the profession worldwide. SAICA was already functioning and influencing major changes to the profession in the mid-1990s when a united South Africa emerged under Nelson Mandela as President. Yet, it also becomes clear that a summary of SAICA’s achievements cannot reflect the environment in which it operates without also referring briefly to its earlier roots.

The local history of the profession in South Africa may have started when Frederick Verburgh landed at the Cape at the same time as Jan van Riebeeck (1652) to become bookkeeper-in-residence to the Dutch East India Company (VOC).

Through the decades and centuries since then, the events that led to creating SAICA followed circuitous routes through the discovery of diamonds and gold that supercharged the local economy in the late 19th century, the creation of the Johannesburg Stock Exchange in 1887, and major local political upheaval and change. This included the South African War (also known as the Anglo-Boer War, 1899 to 1902), two world wars, and institutionalised apartheid.

Every development accentuated the need for more accountants and auditors, recognised standards and training, a generally accepted exam system, and a register of qualified accountants. The first representative bodies were the Institute of Accountants and Auditors in the South African Republic (IAASAR) in 1894 and the South African Committee of the Society of Accountants (SAC) in the Cape in 1896. By 1910, when the Union of South Africa created a political union of the four separate geographical areas, each of the Transvaal, Orange Free State and the British colonies of the Cape and Natal had formed local accounting bodies.

Meanwhile, in 1909, the Transvaal Society of Accountants (TSA) published the first professional publication for accountants – the quarterly The South African Accountants’ Journal, which was renamed The South African Accountant and Auditor in 1911 and merged with The South African Accountant in 1917.

In 1921 the four local accounting societies agreed to establish the South African Accounting Societies’ General Examining Board (GEB) to enforce standards within the profession, and in the same year the Free State, Cape and Transvaal accounting societies agreed to join forces to pursue legal recognition by Parliament of a national accounting body. However, there was no easy route to reach this goal and it would only be decades later, in 1980, that SAICA was finally established.

Major international and local political milestones included the passing of the Companies Act by the then Union Parliament in 1926 and the Chartered Accountants Designation (Private Act) 13 of 1927 that allowed members of the four chartered accountancy provincial societies to use the title of Chartered Accountant (South Africa), or CA(SA). In the same year that World War II (1939 to 1945) ended, the four provincial societies and the Rhodesian Society of Accountants (RSA) created the influential Joint Council of the Chartered Societies of South Africa (JC). By 1950, the General Examining Board (GEB) allowed certain universities to teach accountancy and set exams. The promulgation of the Public Accountants’ and Auditors’ Bill 51 of 1951 to regulate the accountancy profession and provide for a single register of public accountants created the Public Accountants’ and Auditors’ Board (PAAB).

Meanwhile, formalised apartheid had arrived in 1948 when the government of Jan Smuts was replaced by the National Party under DF Malan. Apartheid legislation included, for instance, the Extension of University Education Act of 1960 that created separate institutions of higher education for white, black, coloured and Indian people.

The country was shaken by the events in Sharpeville in 1960 when 67 people were killed after public protest against the carrying of passes. A year later (1961) South Africa left the British Commonwealth to become a republic. Increasing political strife and economic isolation followed.

Growing needs

The needs of the profession meant that broadening education became vital. A major role was played by Leonidas (Leon) Kritzinger CA(SA), co-author of the first book on auditing in South Africa, The Principles and Practice of Auditing. In 1965, he was appointed the first Professor of Accountancy at the new University of Port Elizabeth and later Professor of Accountancy at the University of Cape Town. He introduced the first BCom (Hons) in tax for CAs(SA) and in 1970 an honours degree in Financial Accounting.

Yet, different universities offered different degrees and certificates, while there was also conflict with the PAAB that wanted to establish a uniform CTA course and content for undergraduate commerce. Kritzinger pushed for dedicated postgraduate programmes and a research component, while pioneering courses in business data processing, and a conversion course to enable promising graduates in other fields to achieve a diploma in accountancy and write the qualifying exams for CA(SA).

By 1970, 11 South African universities had been accredited by the PAAB to offer undergraduate programmes in accountancy, followed by a postgraduate programme. The profession also began to subsidise lecturers’ salaries to ensure quality teaching. The choice for black, coloured and Indian students was then limited to the University of South Africa (UNISA), and the universities of the North, Fort Hare and Zululand. Shades of what SAICA’s Thuthuka programme today does in terms of empowerment and support to previously disadvantaged groups could be seen as early as 1972 when PAAB began to subsidise lecturers at the universities of Durban-Westville and the Western Cape dedicated to Indian and coloured tertiary education respectively.

Amidst the political upheaval, developments that led to the creation of SAICA continued. In 1966 the JC changed its name to National Council and a year later, a Common Body of Knowledge (CBOK) report recommended the expansion of university education for accountants to graduate level, while the study period for the Certificate in the Theory of Accounting (CTA) was extended to five years.

In 1973, Parliament passed the Companies Act, the same year that the International Accounting Standards Committee was created. A year later (1974) came the introduction of Generally Accepted Accounting Practice (GAAP) and three years later South Africa became a founding member of the International Federation of Accountants (IFA).

By the late 1970s it had become clear that the country needed more black accountants and too few were entering the profession, while the path to a CA(SA) took 12 years. It was only in 1976 that Wiseman Lumkile Nkuhlu became the first black chartered accountant in South Africa. In later years, he would be elected president of SAICA, serve two terms from April 1998 to April 2000, and become a distinguished role model.

The need to attract interest in accounting at school had already prompted a ‘young executive’ programme in 1978 – another forerunner of what Thuthuka does today to find and support promising young people to achieve CA(SA) status. The PAAB unsuccessfully tried to get a blanket exemption from apartheid’s restrictions for black articled clerks.

In 1980, a commission of inquiry into developments in the accounting profession headed by Michiel Georg Loubser recommended major changes, including better integration of academic training. They warned that South Africa would run short of the accountants essential to national prosperity if it continued to recruit only from the white community. With one black CA(SA) with 37 in training and 10 coloured CAs(SA) with 81 in training, there was clearly a big need.

Finally, SAICA

Thus, on 12 February 1980, after many efforts and debates over the years to create a unified national body, came the establishment of SAICA to speak with a single voice for accountants under its executive director, the visionary Kenneth Gordon Mockler.

The establishment of SAICA became a watershed moment marking a transition from provincialism to a more cohesive national identity with clear objectives: encourage collegiality, involve all societies in the Institute and maintain exceptional standards. To reach these objectives, the Institute introduced a revolving presidency and welcomed the membership of accountants working outside the sphere of public practice in commerce, industry and government. GAAP would promote technical superiority.

In 1985 the Association for the Advancement of Black Accountants in Southern Africa (ABASA) was created to promote the professional interests of black accountants, and the new Eden Trust bursary scheme to increase black and coloured entry into the profession became the forerunner of SAICA’s Thuthuka Bursary Fund.

Technology also played a role in developments during the next years: the first symposium on the control and audit of modern information systems was held in 1985, while SAICA added a technical director, Graham Terry. The next year the Rand Afrikaans University (today the University of Johannesburg) introduced an MCom degree specialising in computer auditing.

In 1991 PAAB and SAICA launched an investigation into the accountancy expertise that would be required in a post-apartheid era – leading in 1993 to the PAAB qualifying examination system changing so that exams are written in two separate parts. Five years later, in 1998, PAAB agreed to transfer responsibility for education and training to SAICA.

South Africa adopted the international conceptual framework of GAAP in 1990 while a 1992 amendment to the Companies Act called for disclosure of any departures from the statements of GAAP.

The year when Soweto erupted had been 1976. It prompted anger and a generation of young people to become politically active. Local and international political pressure would continue unabated until the watershed unbanning of liberation organisations in 1990 finally opened the way to start talks, the Convention for a Democratic South Africa (Codesa) negotiating process and ultimately the new South Africa.

A new SA

On 10 May 1994, Nelson Mandela was inaugurated as president of the new South Africa. In the same year, the first King Report on Corporate Governance (King I) recommended legal backing for accounting standards while SAICA appointed Phindi Mabena as black advancement director.

Notable for SAICA’s education programmes was the South African Qualifications Authority (SAQA) Act that recognised on-the-job training as a legitimate skill, and SAICA registered its courses with SAQA in 1995.

The ANC-led government introduced the Growth, Employment and Redistribution (Gear) strategy in 1996.

While the LeisureNet bankruptcy in 2000 cast a shadow over some local audit firms, international developments around the turn of the century included the Enron scandal (2001) that led to the collapse of Arthur Andersen. There was also the merger of Price Waterhouse and Coopers & Lybrand (1999) creating PwC, the world’s largest accounting firm. The WorldCom bankruptcy triggered a global financial crisis and the Parmalat scandal tarnished the reputations of international banking and accounting firms (2002). A few years later, in 2007, a major global financial crisis followed the collapse of the US housing market.

Locally, a number of large South African companies moved their primary registration to London as of 2000, which meant that many CAs(SA) began to work abroad. A committee was formed to look after the interests of SAICA members in the UK in 2006.

In 2001, SAICA created The Hope Factory aimed at boosting entrepreneurship and employment. The Thuthuka Bursary Fund followed in 2002 to increase and improve opportunities for black students to enter the profession. In a related move in 2007, the Accountancy Profession Broad-Based Black Economic Empowerment Charter (AP B-BBEE) was introduced.

A major development came when South Africa adopted International Financial Reporting Standards (IFRS) in 2005. In terms of the Auditing Profession Act of 2005, the PAAB was renamed the Independent Regulatory Board for Auditors (IRBA) in 2006. This latter move came among others as a result of criticism of the industry and also to deal with major corporate scandals. Critics included the then Minister of Finance, Trevor Manuel, who became concerned at the number of high-profile audit failures.

SA standards in the limelight

International standards came into sharp focus in first decade of the 21st century.

The new Companies Act 71 of 2008 made compliance with GAAP a requirement.

Then came a major moment when South Africa stepped into the international accounting limelight: the release of the King III report in 2009. It included a key innovation: integrated reporting (IR). Today IR is compulsory for every company listed on the JSE and has been adopted by many countries throughout the world.

Small wonder that in 2010 the World Economic Forum (WEF) rated South Africa first in the world for stock exchange regulation, financial reporting and audit standards, and second for corporate governance. In 2012 Judge Mervyn King received the International Gold Service Award of the International Federation of Accountants (IFAC) for outstanding contributions to the profession. SAICA issued its own first integrated report in 2011 (for 2010).

In 2014 SAICA and the IRBA agreed that SAICA would be responsible for the training, discipline and standards of its members while the auditing qualification remained the responsibility of the IRBA.

Ironically, despite the positive effects of the King III report and the local industry’s high standing internationally, the profession came under intense negative scrutiny in recent years because of company collapses and corruption where auditing firms were implicated – notably the KPMG debacle in 2017, when the South African arm of the international auditing and consulting firm became embroiled in the scandal over state capture and the role of the then South African President and the Gupta brothers. Added to that were the investigations into African Bank that was placed under curatorship in 2014 and the corporate fraud scandal (2018) of the highly rated Steinhoff group. With unexplained mistakes in its financial reporting, the group’s chief executive, Markus Jooste CA(SA), resigned with immediate effect, followed by interim executive president billionaire Christo Wiese.

The message of SAICA CEO Terence Nombembe, formerly South Africa’s Auditor-General, was clear: the profession was doing everything possible to create and enforce safeguards. “I can reassure everyone that we keep a constant watch and are rigorous in protecting the public interest,” he said.

Addressing instances that could taint the profession included new provisions to SAICA’s code of conduct in 2017. These impose an obligation on accountants to speak out if they discover or even suspect a breach of the law or regulations. A sensible word came from Zimkita Mabindla, one of the remarkable women nurtured by SAICA and its former senior executive in charge of corporate reporting: “I have argued that there are sufficient regulations to produce ethical organisations that produce effective corporate governance … applied correctly and with good intentions, these regulations would have yielded credible results … It is also safe to assume that most South African organisations do apply these regulations appropriately and with good intentions … We might not need more regulations. We need to create corporate environments that reward good ethical behaviour.”

On a lighter note: in 2014, the Top 35-under-35 competition was launched, an innovative idea of Gerinda Engelbrecht, a Project Director at the Brand department of SAICA, to provide a platform to showcase youngsters of 35 years of age or under who are trailblazing in various areas of business such as corporate, entrepreneurship or academia. In 2023, SAICA celebrates its 10th anniversary marking 350 youngsters who have received the coveted title of Top 35-under-35 finalist.

Today and tomorrow

Responsible leadership is a keystone of the SAICA philosophy today. The Institute still speaks with a single voice on behalf of accountants, involves all stakeholders in decisions and maintains exceptional professional standards.

It is supported by major programmes and initiatives to support the intent of the organisation, and it places a high value on transformation. Thuthuka is today recognised as one of the most advanced assistance programmes in the country.

The past three years hold significant milestones reached such as the launch of the Unite 4 Mzansi™ initiative, in 2021, which aims to create solutions to the nine impediments to South Africa’s economic growth, as per the National Development Plan (NDP) as well as the UN’s Sustainable Development Goals (SDGs). In 2022, SAICA partnered with the Chartered Institute of Government Finance Audit and Risk Officers (CIGFARO) for greater reach and more positive impact in the public sector.

It gives the profession great pleasure to announce its first black woman CEO, Patricia Stock CA(SA), who takes the helm on 1 December 2023.

In a changing world with new demands imposed by politics, new media and ways of communicating, climate change and changing corporate structures, SAICA stresses the skills and abilities demanded of the modern accountancy and management professional. However, through SAICA’s vision of responsible leadership, we will continue our efforts to elevate the value and impact of SAICA in transforming society and empowering others to create value.