School of Accountancy (ETDs)

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Disallowing the utilisation of an assessed loss: a survey of South African case law
(University of the Witwatersrand, Johannesburg, 2023-01-26) Schreuder, Sharolta; De Koker, A. P.; Soni, Faeeza
The purpose of this report is to examine the circumstances in which the utilisation of an assessed tax loss can be disallowed. This research evaluates the provisions of section 20 of the Income Tax Act 58 of 1962 to the effect that the set-off of any balance of assessed loss incurred by a taxpayer (such as a company) in any previous year of assessment is admissible only against income derived by the taxpayer from carrying on a trade. The report focuses on how companies should have regard to the general legal principles laid down in the case law in considering whether they have satisfied the “carrying on [of] a trade” requirement in order to carry forward an assessed loss. The research suggests that taxpayers should also be aware that the South African Revenue Service (“SARS”) may nevertheless invoke the provisions of section 103(2) of the Act to disallow the utilisation of an assessed loss
Disciplinary power and the proactive monitoring unit
(2020) Flowers, Kevin Eitan
The value of independent bodies charged with monitoring and improving the quality of financial reporting is becoming increasingly recognised around the world. The United States of America, United Kingdom and the European Union are examples of where such bodies exist. South Africa has created the Proactive Monitoring Unit (PMU). The PMU monitors the financial statements of companies listed on the JSE to ensure that they comply with International Financial Reporting Standards (IFRS).As most of these bodies are relatively new, there is limited research exploring how they function. This thesis aims to understand monitoring bodies better. Specifically, it will investigate if the PMU’s activities utilise Foucault’s disciplinary power to achieve results. 17 semi-structured, open-ended interviews with financial statement preparers, auditors, regulators and academics were conducted. The PMU is indicative of a partitioning mechanism used by the JSE in order to monitor and control the financial reporting space of listed companies. Preparers and auditors resemble well trained individuals who follow the PMU’s guidance without question. Respondents felt the constant gaze of the PMU which, combined with the negative reputational impact of an adverse review, leaves preparers and auditors fearful of the PMU. This anxiety seems to create a belief that preparers and auditors must present their financial statements as instructed by the PMU. This is one of the first theses which examines how external monitoring bodies function in a real-world setting. It adds to the limited accounting research which investigates why monitoring mechanisms achieve or do not achieve compliance. This is the first study to consider the functioning of external monitoring bodies in an African setting. This will provide insight into how monitoring bodies may best be constructed to improve corporate governance
Evaluation of the extent of disclosure of the UN Sustainable Development Goals (SDGs) in integrated reports by 40 South African companies listed on the Johannesburg Stock Exchange (JSE)
(University of the Witwatersrand, Johannesburg, 2023) Manack, Ilhaam; Maroun, Warren; Lange, Yvette
In a world where resources are finite, sustainable development is of utmost importance to ensure the survival of the world as we know it. Many of the crises faced by the world such as poverty, a lack of clean water, deforestation and pollution can be reduced and, potentially, resolved through contributions from public and private organisations. In actual fact, many of these organisations contribute to the problems at hand as a result of a lack of regulatory guidance on sustainable development. This report provides insight into the integrated reports of 40 JSE-listed companies using the process of content analysis to ascertain each company’s contribution to sustainable development, through aligning its corporate practices with achieving the UN Sustainable Development Goals (SDG). No guideline currently exists for preparing SDG-related disclosures to be presented in integrated reports. As a result, a disclosure checklist was created for this purpose. It was found that SDG-related disclosures are predominantly vague and minimal, ifthey were given at all. Additionally, companies tend to provide more SDG-relateddisclosures over time. This research contributes to a small body of existing research in the field of SDG disclosures in integrated reports. This study is the first study to analyse the extent of SDG-related disclosures in South Africa
Exploring segmental reporting in integrated reporting
(2021) Mpete, Thato
This paper explores the link between segmental disclosures in the integrated reports of the top 100 JSE-listed entities and integrated reporting quality (IRQ). A content analysis has been performed over 3 years to identify links between segmental disclosure in the integrated report and the annual financial statements. This paper analyses whether entities which have integrated segments throughout their reports achieve better IRQ. This paper also analyses whether the segmental disclosures within the integrated report point to the emergence of integrated thinking. The findings indicate that the segmental disclosure in the integrated report mimics that in the annual financial statements. In addition, this thesis finds a correlation between segmental disclosure and IRQ. Companies which integrate segment disclosure throughout the integrated report are also found to achieve better IRQ. The findings suggest that segmental disclosures which are integrated provide further insight into the value creation process and are indicative of integrated thinking. Integrated thinking can be evidenced by management’s understanding of the entity, disclosure consistency in the integrated reporting and annual financial statements and integration within the business model.
Impression management through minimal narrative disclosures in integrated reports: an analysis of the top 100 JSE listed firms
(2021) Chothia, Aadil
Orientation: Two crucial aspects to corporate reporting is transparency and accountability within the Integrated Report (Leung, Parker, & Courtis, 2015). Transparency within the Integrated Report allows for the users of the report to understand the financial position and underlying economics of the firm. Narrative disclosures in the Integrated Report forms a part of the annual corporate financial report and serves as a means of communication between management and investors. Narrative disclosers can also serve as a medium for impression management strategies utilised to distract investors’ attention from a firm’s weaknesses. This can be achieved through “selectivity” which involves including or omitting certain items of information within the Integrated Report (Merkl-Davies & Brennan, 2007).Research purpose: The purpose of this study is to determine if the top 100 JSE listed companies utilise impression management strategies, specifically through minimal narrative disclosures in their Integrated Reports. This will allow the researcher to “explore the phenomenon of concealment strategy through minimal narrative disclosures. In this study, the researcher focuses on selectivity in neglecting narrative information in the Integrated Report and extends the body of knowledge relating to impression management using concealment strategy, specifically discretionary narrative disclosures. Overview of research method: This was an adaptation of a study conducted by Leung et al. (2015) and was of a quantitative nature which involved the systematic investigation of the research questions through statistical methods on the data gathered. The research involved two phases. Phase 1 involved the identification of minimal narrative disclosure firms using a disclosure corpus. Phase 2 allowed the researcher to explore the sub-research questions which involved the use of a multivariate regression model. Main Findings: The study illustrated that from the sample firms selected, 49% were classified as minimal narrative disclosure firms based on their disclosure score obtained from the disclosure checklist. The study also showed that there is no association between a firm’s current performance and their minimal narrative disclosure firm score and revealed that there is an association between a firm’s financial distress levels and the minimal narrative disclosure firm score obtained by the firm. No evidence was obtained to support that minimal narrative disclosures in Integrated Reports are associated with future performance of a minimal narrative disclosure firm (whether future performance improves or deteriorates) within the context of this research
Tax Implications of intellectual property transactions in South Africa
(2024) Sinobolo, Phindulo
Intellectual property law is a category of property that includes intangible creations of the human intellect, and primarily encompasses copyrights, patents, designs, trade marks and know-how. The intention of the use of intellectual property is important to determine the correct tax treatment to be assigned in the calculation of taxable income in a particular year of assessment. The Income Tax Act 58 of 1962 (‘Income Tax Act’) is used, in this discussion, as a basis for determining the appropriate tax treatment of intellectual property transactions. Extensive focus is placed on discussing the tax incentives of royalties, premiums, acquisition of intellectual property and internally generated intellectual property. It should be noted that one should consider case law and the specific circumstances of each case, to determine whether the amount related to intellectual property will be deductible in terms of s 11(a). An overview of the tax implications for a franchisor and a franchisee is depicted when both parties enter into a franchise agreement. The taxation of image rights is specifically included in this discussion as companies, through their brands (i.e., trade marks) affiliate themselves with celebrities, sports professionals and influencers to drive their marketing strategy. A brief transfer pricing discussion regarding intellectual property is contained in the research report as it is imperative to determine whether an affected transaction has been entered into between connected persons which results in a tax benefit being derived.

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