Browsing by Author "Van Zijl, Wayne"

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An exploratory analysis of the environmental and social incentives of key management personnel for JSE-listed companies
(University of the Witwatersrand, Johannesburg, 2024) Haripersadh, Shriya; Burnham, Kayleigh; Van Zijl, Wayne
Societal pressure on companies to be environmentally and socially responsible as well as stock exchange requirements have led to the wide adoption of integrated reporting by public companies in South Africa (Baboukardos & Rimmel, 2016; De Villiers et al., 2014; IoDSA, 2016; Lokuwaduge & Heenetigala, 2017; Moloi & Iredele, 2020). The prior literature discusses the importance of remuneration linked to Key Performance Indicators (KPIs). Consequently, analysing whether Key Management Personnel (KMP) have non-financial KPI-linked remuneration provides strong evidence of a company’s commitment to being socially and environmentally responsible. Currently, no research investigates this globally and in the South African context. This study presents a comprehensive comparative analysis of the integration of environmental and social (ES) KPIs in KMP remuneration for South African Johannesburg Stock Exchange listed companies. Data was collected from twenty companies from the JSE’s top, middle and small capitalization companies at different points in time (2011, 2018 and 2022) using content analysis to provide a total sample of 60 companies with 180 firm-years. Data was analyzed using descriptive and inferential statistics. The prevalence, distribution and settlement methods of E, S, and combined ES KPIs in KMP remuneration structures were examined. Utilising both agency theory and stakeholder theory, the research explores how linking the remuneration of KMP to ES KPIs may serve the interests of both shareholders and stakeholders. The findings reveal a progressive adoption of ES KPIs in KMP remuneration structures over the investigated years, with notable variations observed across industries and company size. Larger companies and companies with higher social and environmental impacts utilize more ES KPIs in their remuneration policies. Industry-specific trends influencing the integration of ES KPIs were identified, shedding light on the evolving landscape of corporate governance and sustainability practices. By elucidating the dynamics between KMP remuneration and environmental and social performance metrics, this study contributes to a deeper understanding of how companies incentivise responsible leadership and foster sustainable business practices.
An overview of the moderating effect of a simplified tax administration system on compliance and taxpayers’ perceptions
(University of the Witwatersrand, Johannesburg, 2022-06-30) Manganya, Andile Khulekani; Van Zijl, Wayne; Cerbone, Danielle
The Tax Administration Act and systems are the most important pieces of legislation and mechanisms that should be in place and need to be executed with thorough care, efficiency, and considering the taxpayer’s attitude, behaviours, and the general economic and tax environment. In the South African context, there is a need to increase the collection of revenue and enforcement to provide quality services. There are still challenges and uncertainties across multiple tax disciplines, and difficulties in the implementation of these tax laws. Therefore, there are misalignments and challenges within the administration processes, both from a legislative and practical perspective. Several significant changes have been identified and has led to the improvements within the South African tax system, these changes to the system arise from various interventions such as “remodeling of the independent tax and customs administration.” These and many other significant changes have aided and contributed to a relatively robust and competitive tax system. The current South African administration system is stable and favourably compared with those of many developed and emerging economies. The study concluded and noted multiple variables that can be identified as misalignments and gaps within the administration, these range from both operational and legislative perspectives, such as the audit process, SARS service delivery during COVID-19, granting extensions, difficulties within the use of E-filing, debt management process, difficulties around the implementations of the health promotional levy, SARS in working with various stakeholders and regulatory bodies and many more other issues. As a result, tax compliance depends on many factors, other than deterrence, and the perceptions of taxpayers are more likely to be influenced by these factors and gaps within the tax administration system. Therefore, it is important to work towards creating a balance in our tax system by improving the administration system, while simultaneously bringing in more revenue collection without impairing the taxpayer’s behaviour and perceptions
Corruption and Financial Mismanagement in State-Owned Entities – The role of Fiscal Legislation in deterring corruption and fruitless and wasteful expenditure in State-Owned Entities
(University of the Witwatersrand, Johannesburg, 2022) Mkhwanazi, Zola Elsie; Van Zijl, Wayne
Corruption has been around for thousands of years, but in recent years, it has been increasing and has attracted world-wide attention. South Africa as a developing country, has also been affected by corruption and also financial mismanagement in its State-Owned Entities. South African tax law, like most tax law across different jurisdictions, generally provides for tax reforms that promote the anti-corruption drive in government entities and tax reforms that manage fruitless and wasteful expenditure. As corruption and fruitless and wasteful expenditure continuously increase in government entities, concerns about the impact on liquidity of these entities due to the misappropriation of public funds also increase. The evidence of this paper aims to address the following question: Have the promulgated tax laws been effective (proxied by perceived corruption) in deterring corruption and fruitless and wasteful expenditure in South African State-Owned Entities? The tax regulations against which an analysis was performed are: 1. Provisions of section 23(o) of the Income Tax Act, 58 of 1962 which regulate the deductibility of illegal expenses and fruitless and wasteful expenditure. 2. Application of the definition of gross income on illegal receipts. Specifically, it has been found that the increase in corruption, increases tax non-compliance which means it is most likely that those who are party to corruption, are likely not to comply with the laws promulgated to reduce corruption. It has also been found that fruitless and wasteful expenditure is high, and it mainly relates to interest and penalties levied by creditors and South African Revenue Services. The higher the fruitless and wasteful expenditure, the higher the amount subjected to non-deductibility for State-Owned Entities
IFRS 10 and IFRS 12: Motifs of panopticism
(2014-03-10) Van Zijl, Wayne
Recent changes to the IFRS may not be motivated only by economic rationality. Using IFRS 10 and IFRS 12 as a case study, this thesis argues that powerful social and institutional forces are also at work. Grounded in a critical epistemology, the research employs a Foucauldian theoretical framework to demonstrate how elements of enclosure, efficient bodies and Disciplinary Power and Control characterise these recently released accounting standards. Detailed interviews with a sample of some of South Africa’s leading accounting and corporate governance experts are used to explicate the subtle operation of Foucauldian theories of transparency and accountability which, due to the prevalence of positivism and agency theory, have been largely ignored in a financial reporting setting. In challenging the position that accounting is a neutral means of gathering and reporting information to support efficient allocations of capital, this thesis adds to the critical body of financial reporting research. The research is among the few papers to examine financial reporting inspired by Foucault’s model of Disciplinary Power and Control. Concurrently, it responds to the call for critically-inspired research in non-Anglo-Saxon settings by exploring financial reporting in a South African context. As an added benefit, given the recent release of IFRS 10 and IFRS 12, the thesis offers the first account of these standards free of positivist dogmas.
The evolution of consolidation accounting: an application of chaos and memetic evolution theory
(University of the Witwatersrand, Johannesburg, 2024) Van Zijl, Wayne; Maroun, Warren
Many researchers have explored the evolution of accounting either as a technical and quasi- scientific discipline or as a social construct that both influences and is influenced by history. Some researchers have considered the role played by agency costs, economic pressures, regulation and the complexity of modern business. Other researchers have focused on political lobbying, the socialisation of accountants and the agency they have when applying accounting prescriptions as key evolution factors. The impact of power struggles and acts of resistance have also received much attention. This thesis builds on these earlier works by proposing a novel framework of accounting evolution inspired by two non-accounting theories: Darwin’s theory of evolution by natural selection and chaos theory. Using the case of consolidation accounting, 30 detailed interviews with local and international financial reporting experts illustrate how accounting theory and practice evolve at the macro- and micro-level. In doing so, the thesis helps to reflect how different perspectives highlighted by the prior literature can function concurrently under the proposed framework. The application of chaos theory suggests that consolidation accounting’s macro evolution is characterised by five observations. Firstly, consolidation accounting’s evolution is intertwined with and influenced by other systems, including business practice, taxation regulations, social norms and economic pressures. Secondly, accounting’s future state is highly dependent on its current state. This creates a path-dependency where its trajectory up to a specific point constrains its trajectory after that point. Thirdly, consolidation accounting remains relatively unchanged (stable) until it is disturbed. The presence of feedback loops may amplify or dampen disturbances leading to the possibility of disproportional change. Fourthly, consolidation accounting’s evolution indicates the presence of fractals, where the evolutionary pattern observed at one level resembles that of another. Fifthly, the accounting “rules-of-thumb” that develop over time may more accurately be described as strange attractors that pull accountants towards specific techniques, concepts and disclosures. In doing so, they create a sense or order because they limit the countless possibilities about how transactions and events might be treated. The application of Darwin’s theory of natural selection to non-biological systems is called memetic evolution. Considering memetic evolution of consolidation accounting at the micro-level reflects five core observations. Firstly, memetic evolution explains why accounting’s future state is Page 6 of 217 dependent on its current state. No “new” consolidation accounting technique, concept or disclosure (meme) is truly original but is a modification or recombination of one or more existing memes. Accordingly, consolidation accounting’s future state is dependent on its current state. Secondly, memetics shed additional light on how and what constitute disturbances under chaos theory. Disturbances can arise from changes to related systems, inaccurate inheritance processes, through the active modification of existing memes or the degradation of memes in accountants’ memory. Thirdly, memetic evolution enhances our understanding of feedback loops identified by chaos theory and why radical changes are often rejected in favour of marginal change. Fourthly, memetic evolution exhibits that consolidation accounting’s evolution is about the selfish replication of accounting memes. Consequently, researchers should not assume that currently accepted theory and practice represents the “best” or most “desirable” accounting prescriptions. Supporting chaos theory’s path-dependency, memes use different strategies to “win” the accounting meme selection game and become more prolific. Consequently, the criticism that accounting incentives short-term profit seeking behaviour may not represent a shortcoming of the accounting community but rather the power of evolution by natural selection. Finally, related systems co-evolve creating a complex and chaotic dynamic evolutionary environment. While the focus of the thesis is consolidation accounting, the findings are broadly applicable to accounting evolution in general. For example, the findings suggest that the accounting standard setters may serve the profession better by developing short- to medium-term accounting standards as opposed to striving to set more permanent standards. The findings form the foundation of a new research agenda into the chaotic and memetic evolution of accounting. However, there are limitations to the current study. Only purposive sampling 30 interviews were conducted to ensure participants had the qualifications and experience to provide meaningful insights, introducing an inherent bias potential.