4. Electronic Theses and Dissertations (ETDs) - Faculties submissions

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    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.
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    Enhancing Corporate Governance Systems through Adoption of Blockchain Technology in Small, Medium and Micro Enterprises (SMMEs) in South Africa
    (University of the Witwatersrand, Johannesburg, 2024) Nyembe, Sanele; Totowa, Jacques
    Instances of corporate fraud, exemplified by cases such as Enron in the USA,Steinhoff in Germany/South Africa, and Tongaat Hullett in South Africa, have becomeprevalent worldwide, inflicting severe repercussions on diverse stakeholders. Despitethe widespread occurrence of such frauds, they often evade early detection, resultingin substantial financial losses and erosion of shareholder value. Effective corporategovernance systems are intended to serve as the ultimate surveillance mechanism tofilter out various forms of corporate fraud.Technological advancements, particularly blockchain, hold promise for enhancingcorporate governance effectiveness. Blockchain, a digital ledger technology thatrecords transactions in immutable blocks, offers potential benefits in detecting andpreventing fraud. Importantly, blockchain technology is envisioned not as areplacement but as a complementary addition to existing corporate governancesystems to enhance their efficacy.The objective of this research was to analyse the potential impact of blockchain onSMMEs in South Africa through an online survey targeting professionals with varyingexpertise. The results of the survey, encompassing 214 respondents from diverseprofessional backgrounds including accountants, ethics committee members, boardmembers, and blockchain technology experts, revealed a consensus on the positiveimpact of blockchain integration with corporate governance pillars in curbing corporatefraud within SMMEs. The Likert scale results indicated an average score of 4.09 outof 5, suggesting a predominantly positive perception of blockchain's efficacy inaddressing corporate fraud in SMMEs. The results revealed that technologicalintervention, acting as a mediating factor between current corporate governancepractices and the capacity for early fraud detection, would yield positive outcomes. Asillustrated through the conceptual framework
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    Exploring Covid-19 disclosure patterns: A comparative analysis of the financial statements of a sample of top-, mid-, and small-tier companies listed on the Johannesburg Stock Exchange, Nigerian Exchange and the London Stock Exchange in the 2020 and 2021 financial years
    (University of the Witwatersrand, Johannesburg, 2023) Makara, Motanyane; Gomez, Samantha
    This study is an exploration of the impact of Covid-19 on the accounting standard disclosures of a sample of companies from the Johannesburg Stock Exchange (JSE), Nigerian Exchange (NGX) and London Stock Exchange (LSE). The study is a comparison of the impact of Covid-19 between developing nations and a developed nation. It explores how the impact of Covid-19 was disclosed in the financial statements of the sample companies from the top-, mid-, and small-tiers of the stock exchanges. Stakeholder theory and Legitimacy theory are applied to better understand the study due to their emphasis on transparency and accountability to shareholders. A content analysis was carried out using financial statements of 90 companies from the LSE, 79 companies from the JSE and 37 companies from the NGX. Covid-19 disclosures were not as prevalent as expected in the financial statements. The study finds that the JSE and LSE had a higher number of Covid-19 disclosures than the NGX in both years. The number of disclosures between the market tiers varies by stock exchange however. The most impact disclosed in all the stock exchanges revolved around IFRS 16 Leases, IAS 1 Presentation of Financial Statements with focus on going concern, and IAS 36 Impairment of Assets. Covid-19 had the consequence of halting business activity globally. This meant assets were unused, affecting impairment and leasing activities. Going concern also became a major issue for businesses worldwide. The study is guided by the legitimacy and stakeholder theories to contribute to the literature on the impact of major events on the disclosure practices of entities taking into the need for stakeholders to have adequate information provided