Keynote address Presented at the African Accounting Association Conference in Durban, SA, 29 June 2018.

 

It is always beneficial to be in the company of people who spend some time sharpening their minds in order to become of value to society. It is always an honour and privilege to be in the midst of people who are becoming, who are chiseling themselves for greater society.

 

For the Acholi people of Uganda have for centuries been saying however long a log of wood stays in water, it just don’t become a crocodile. Even if it is the shape of a crocodile, looks like one, it does not become a crocodile. Even if it stays under water, even muddy murky waters of the crocodile-infested Duze river nearby here the wood remains wood. It is better at becoming wood than crocodile. So, you are.

 

Greetings to you. Thank you to the hosts, the leaders of the association for honoring me with the opportunity to attend this. Umongameli Zama Yeyeye, abathi bedla bebe beyenga umuntu ngendaba, and deputy Brian Ngiba omageza ngobisi amanz’ekhona, and the entire esteem team of leaders you work with to grow and strengthen this one of our most important practices and professions in the world, accounting. Again, good morning, dumelang, abusheni, ndimatshiloni, llgoas, habari za asibuhi...

 

Accounting is both about counting and balancing figures and holding figures to account. It is about figures in the sense of numbers as well as figures in the sense of what responsible human beings do with money society generates. Though you may have become fixated on the number figures, your greater value for society is accountability both economic and political. Accountability in a sense can mean the extent to which we can account for what we have and do.

For this reason, I am pleased to see that you aim to dialogue, discuss and meditate together on matters that make you matter beyond your professional circles... the matters accounting remaining relevant in the midst of change, as Zama puts it.

 

Let me pose a question: Can Accounting Account for the state of the Nation and Its Future?

How does your community of practice see it’s contribution to build stable, well-governed, prosperous and efficient society?

How does it explain its social usefulness?

 

I would like to pose these questions because you are gathered here to exchange ideas about a whole range of issues that concerns those who research matters related to the accounting practice and profession in Southern Africa. These questions that I pose come to mind partly because your field has been on the spotlight for good reasons for a long time but recently it has also been cast in bad light by actions, we all like to believe, are isolated of a few rotten apples.

 

In 1998, a waste management company reported 1.7 bill dollars worth of fake earnings with the asistabce of Arthur Andersen. In 2001, Enron energy corporation los some 74 bill dollars in retirement accounts with the help of Arthur Andersen again. There is also Tyco that lost half a billion in 2002, healthSouth 1.4 bill 2003. freddyMac in 2003 lost 5 bill, Lehman Brothers in 2008... all these put your practice and profession on the spotlight. While this caused you harm but it also gave you an opportunity to redefine your role in society. Even if water drowned your child, you still need to drink it. We need you.

 

The KPMG’s entanglement in matters of state capture did more harm to your profession than the hundreds of accounts who allow and even permit the embezzling of funds daily in the public sector. I say this because the KPMG is a major custodian of the pride of place that your profession and practice occupy in the soul of this and many nations. It has alongside a few others like PriceWaterCooper stood out as the example of the nobleness of your work, and the value society derived from it. When it fails, it fails not as itself but as an epitome, a mirror of your practice and profession. When it failed to exercise basic judgement and standards your profession should consider simple, it suggests that it was not an error of judgement but a symptom of something deeply wrong deep down in your practice. Like a mouth sore that signals the activity of a terrible flu virus that had laid hidden and unseen, the KPMG affair raises a lot of suspicion about the very essence of your work, your practice and your noble profession.

 

We ask these questions of you because every practice and profession has to account for how it becomes more than a career for a few lucky individuals who make a lot of mine, while leaving many languish in poverty. Everyone of us have to ask ourselves just how what we do helps build a better society than the one that found and live in today, one that is haunted by the demons of inequality including gender inequality, high levels of poverty, despair and desperation everywhere, hopelessness, corruption and criminality. We have to indicate how we contribute to build a society that the national development plan in the case is SA, the SADC Regionak Indicative Strategic Development Plan and the Agenda 2063 for Africa. All of these plans and visitiobs have at the center the wish to build a society where all have clean safe drinking water, a healthy supply of food, basic housing & sanitation, safe and corruption-free communities. How does what you do here in the conference help contribute to build a society where clean audits are not an achievement but a normal conduct? How do we country to stronger accountability, so that no one gets away with crime?

 

Speaking recently to the Association of Chartered Accountants, Jay Naidoo a Minister in Nelson Mandela’s government had the following to say:

 

“Unashamedly, many in your profession had a role in the weakening of our constitutional democracy and has left millions of South Africans scrambling to put food on the table for their children, with a dysfunctional state unable to deliver the most basic services to millions of others. All for 30 pieces of silver.

Look at Enron and Arthur Anderson in the US in 2001, the Parmalat crises soon after, look at the collusion of construction companies in building stadiums for the Fifa World Cup in 2010, look at the collusion of bread companies that raised prices of this basic staple food to rob the pennies of half of our population in South Africa who live in abject poverty. Who paid for all that? People who live hand to mouth. The Poor.”

 

He went to point what many have said in public discussions: that the list of sins that has been committed on behalf of your profession and practice is huge and damaging. You stand accuse for being at the centre idea near collapse of the whole global financial system because you abandoned your noble purpose, which is to be guardian of society against unethical handling of financial resources. As a result, the world experienced massive socks on housing markets, astronomical rises in risks to firms, households and countries, a fall in production output, decline in trade and investment, massive economic slowdown and huge social decay with millions loosing jobs and more thrown into deep poverty.

 

You are accused of assuring corporations hide corruption and hoard billions in investments. You are said to have worked to help the super rich stash wealth even stolen assets through sophisticated accounting manoevres. You are accusing of acting like a child who sent to university to study forensic investigations who now uses these skills to find wherever their parents hide money in order to steal.

 

You are accuse of colluding wit the corrupt both as auditors and accountants. You are said to earn very high salaries off the work that robs the very poor of their livelihood.

 

What shall save a house when its foundations have big holes?

 

The idea that chartered accountants are said to break codes of ethics and conduct is hard to swallows. The guardians of ethics are breaching ethics with wanton, then who will save us from thieves. You are said to serve on boards of companies responsible for corruption, anti-competitive behavior and shed criminality. This is depressing because it calls into question both your competence and commitment to the very principles for which you exist.

 

More than these revelations of unethical conduct and even criminality, the most troubling development through is the silence of the profession and its leaders. It is the silence of your professional associations in the face of such reputation risk and such damage to society, such harm to the poor.

 

You conference is entitled Accounting for a Changing World. I think you mean that as the world changes, it calls for you to think about how to maintain certain accounting standards, how to act in support of justice and ethically, how to protect the weak and how to act independently and honourably. You mean that you work to improve how well you train new accountants to respond to SA and Africa’ need for quality and conscientious accountants. I think you mean working to improve how you conduct accounting research so that it works out also what does it mean to hold the highest standards of accounting in the face of political, corporate pressure and the scandals of the recent past.

 

Are you gonna transcend focus on figures and finding solution to spending more time thinking through what fundamentally are the problems, what lies behind obvious problems and how could they be responded to. These scandals yav thrust upon questions that perhaps do not naturally exercise your interest: questions of governance; contamination by politics; thinking about accounting, ethics and justice, accounting for sustainable development and inclusive economic development, accounting for transformation and social justice; internal audit and ethical business practices; and such themes.

 

Therefore, as I look at subjects like accounting as instruments of economic policy, accounting skills in municipalities, the rotation of audit firms in public sector auditing, leadership dynamics; corporate governance issues, internal audit; and others, I notice that you have assembled a serious group of scholars to think through pertinent situation. But I plead with you to consider more consciously to deal with questions of accounting in the time of scandals and doing so in a manner that enhances the practice’s role evolving democratic consolidation.

 

What is often broken in these situations as you gave in your profession is not things but it is people behind things. When a person is broken, they bring their brokenness into their profession. No amount of fixing standards and systems will be adequate if the problem is the human being. We need smarter ways of training and building a new human being. We therefore do not need to train accountants, but train human beings who are in accounting, then they can excel.

 

I suggest that Accountants will not save your profession, but more just and ethical human beings operating as accountants will. How do we teach on this basis then? How do we research on the basis that we are retooling the human being in the accountant, so that the accountant can also be more useful? It is a question we also have to find answers to.

 

I wish you all the very best of as you help to ensure that this practice of yours regains public trust, so crucial for the health of our nation and prosperity of our region.

 

To learn more about the African Accounting Association, please follow the link: https://clms.ukzn.ac.za/southern-african-accounting-association-kzn-regional-teaching-and-learning-conference-2018/.