Tsakani Maluleke emphasises the role of accountants in building a better country at Finance Indaba.
On 20 October, the Auditor-General of South Africa (AGSA) Tsakani Maluleke kickstarted Africa’s biggest finance conference and expo, the Finance Indaba, with an inspiring keynote, encouraging finance professionals to do better, and be better.
“Our role as finance professionals is to directly influence the lives of people, institutions, nations and the future,” she said. “This comes with huge responsibility, and we dare not excuse ourselves from showing up less than who and what we represent.”
She explained that the more than 1,000 people gathered around the main stage of the Sandton Convention Centre have chosen a profession that leaves no room for selfishness, complacency or mediocrity. “This responsibility demands that we be above reproach in our conduct, be it in our roles as leaders, or simple conscientious citizens of this young democracy.”
Tsakani then posed a question to the room, which the Office of the AGSA has grappled with for a while: “Can mismanagement, corruption and nefarious activities take place without accountants?”
And equally: “Can good governance and prosperity be reached without us?”
Quoting Prime Minister Modi of India, Tsakani explained that a country’s chartered accountants are responsible for its economic health. “Corruption is among the most harmful and urgent issues facing the world’s citizens today. Among its effects are a corrosive impact on economic growth that frustrates poverty reduction efforts and erodes public trust in business, government, and the rule of law.”
However, she explained that the positive role played by accountants worldwide in the fight against corruption is clear, and professionalism is highlighted as an essential component for success. “Professional accountants are one group among a number of vital actors in the economy, including business leaders, governments, and the financial sector, that are key to tackling corruption.”
Tsakani added, “We also play a far bigger and more important role in a nation’s development and economic health.”
According to an IFAC report, The Accountancy Profession – a global value add, economic development, measured by gross domestic product (GDP) per capita, correlates strongly with the proportion of accountants in the workforce. The correlation is strongest among emerging economies, and weaker among the least-developed economies. Professional accountants support economic growth by promoting transparency and efficiency. Their work is crucial to creating and sustaining the investment climate required for improved productivity and economic development.
It also notes that accountants contribute significantly to the sustainability of small, medium, and large organisations, sound capital markets, effective stewardship of public finances and delivery of public services, and – ultimately – economic prosperity.
Tsakani emphasised that, “economic development and improved living standards are linked to the robust accounting profession with a strong link between a robust profession, economic prosperity, and improved living standards – including better life expectancy, more years of schooling, and higher income”.
She further adds that, for those who have been concerned about the increasing levels of poverty, inequality and employment in our country, which we can no longer deny are threatening our hard-won democracy and social cohesion, this is where the answer lies.
Taking a stand
Tsakani said that she appreciates institutions like IFAC when they say they strive to drive sustainable improvements through their environmental, social and governance (ESG) framework. “In simple terms, ESG means acknowledging the responsibility that we as accountants have towards our clients, our employees, independent contractors, suppliers and other stakeholders, as well as the broader community in which we operate.”
Importantly, she noted that nothing is said about the responsibility towards self-enrichment. “Someone missed a step, and others followed! But we’ve all learned the hard lesson and we are striving to do better, because we are better than what recent history says about us.”
In 2019, IFAC began to enforce an enhanced code of conduct that required all professional accountants to behave with integrity, objectivity, professional competence and due care, and confidentiality, and to exemplify professional behaviour. As part of this, IFAC also indicated that a strong governance architecture was crucial to enabling accountants to execute their mandate without fear or favour.
“I know that there isn’t a one-size-fits-all model for all countries,” Tsakani said. “At the same time, we now know that some among us have been found to have acted with nefarious intent and found themselves on the wrong side, affecting the reputation of the profession. This has emerged from many commissions and reports, including the Nugent and Zondo commissions.”
She reminded everyone of their responsibility to be accountable and ethical to change the narrative. “In some ways, in current conditions, we are the last bastion of good governance and accountability, and are important guardians of resources – both public and private.”
Changing the narrative
In recent years, the narrative has been strongly in favour of the role accountants play in financial accountability, fighting corruption, malfeasance. Where this has not been the case, a lot of public scrutiny and outcry has followed.
This, Tsakani added, demonstrates public expectations of the finance profession. “We can neither run nor hide. Our profession is rooted in ethical conduct and sustained credibility, and so it stands to reason that when there’s a negative public commentary about what’s happening in the profession, it’s an outcry.”
However, the finance professionals who do their jobs every day, exercising good ethical conduct and an unwavering commitment to the values and standards they uphold, do not make headlines and the public often does not hear about this work. “We need to make noise about accountants who adhere to good governance and epitomise ethical conduct!”
Tsakani commended everyone in the room for continuing to do good, but invited them to lend a hand to those who require support within their sphere of influence to strengthen some of these principles and values. “I am a firm believer that when one of us does well, we all win. However, the opposite is also true – when one of us fails, we all fail.”
“It is therefore in our collective interest to do what we can to create larger circles of accountability, ethical conduct and unwavering professionalism.”
We need a culture shift
Tsakani explained that the vast majority of finance professionals want to find solutions to the dented reputation of the profession. “I know it is easy to enumerate the problems, and sometimes also the solutions, but most of us fail in the execution.”
She added that the Office of the AGSA has spent a great deal of time trying to understand what needs to be done to improve how public resources are used. “By understanding this, we can begin to be clearer about how we need to do it, so we can start doing the right things to change the poor audit outcomes we keep seeing.”
Tsakani emphasised that it’s not just the audit outcomes they want to change, but the lived experiences of every South African citizen. And the only way to do this is by shifting the culture in the public sector towards better governance and good financial conduct.
“It’s time we truly begin to interrogate the return on investment, as well as the way in which we do things. We simply have to do better,” she said.
Do better, be better
In closing the keynote, Tsakani explained that there are a few things that can be done to improve the way the finance profession does things, and how it responds to new demands and the expectations of South African citizens. “It begins with adopting the habits that enable us to do better. Shifting systemic obstacles to success can create the biggest, most durable change.”
She added that it’s important for the public and private sectors to be on the same side – ethically, morally, and in terms of their responsiveness to the needs of the citizens of the country. “Whether private or public, we can no longer deny that we have a common agenda, a common purpose and a common responsibility to our country!”
Tsakani took attendees back to the question she posed when she started, and concluded with the following:
“We must acknowledge that mismanagement of funds, corruption and nefarious activities will not take place or be prevalent if accountants are visible and alert and do the right thing to protect institutions, companies and the country. We should be ready to do better.”