Masters Degrees (School of Accountancy)
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Browsing Masters Degrees (School of Accountancy) by Subject "Assignments -- Accountancy"
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- ItemAddressing application software package project failure : bridging the information technology gap by aligning business processes and package functionality(Stellenbosch : Stellenbosch University, 2011-12) Kruger, Wandi; Smit, Sybil; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.ENGLISH ABSTRACT: An application software package implementation is a complex endeavour, and as such it requires the proper understanding, evaluation and redefining of the current business processes to ensure that the project delivers on the objectives set at the start of the project. Numerous factors exist that may contribute to the unsuccessful implementation of application software package projects. However, the most significant contributor to the failure of an application software package project lies in the misalignment of the organisation’s business processes with the functionality of the application software package. Misalignment is attributed to a gap that exists between the business processes of an organisation and what functionality the application software package has to offer to translate the business processes of an organisation into digital form when implementing and configuring an application software package. This gap is commonly referred to as the information technology (IT) gap. The purpose of this assignment is to examine and discuss to what degree a supporting framework such as the Projects IN Controlled Environment (PRINCE2) methodology assists in the alignment of the organisation’s business processes with the functionality of the end product; as so many projects still fail even though the supporting framework is available to assist organisations with the implementation of the application software package. This assignment proposes to define and discuss the IT gap. Furthermore this assignment will identify shortcomings and weaknesses in the PRINCE2 methodology which may contribute to misalignment between the business processes of the organisation and the functionality of the application software package. Shortcomings and weaknesses in the PRINCE2 methodology were identified by: • Preparing a matrix table summarising the reasons for application software package failures by conducting a literature study; Mapping the reasons from the literature study to those listed as reasons for project failure by the Office of Government Commerce (the publishers of the PRINCE2 methodology); • Mapping all above reasons to the PRINCE2 methodology to determine whether the reasons identified are adequately addressed in the PRINCE2 methodology. This assignment concludes by proposing recommendations for aligning the business processes with the functionality of the application software package (addressing the IT gap) as well as recommendations for addressing weaknesses identified in the PRINCE2 methodology. By adopting these recommendations in conjunction with the PRINCE2 methodology the proper alignment between business processes and the functionality of the application software package may be achieved. The end result will be more successful application software package project implementations.
- ItemA critical analysis of the tax efficiency of share incentive schemes in relation to employees in South Africa(Stellenbosch : Stellenbosch University, 2012-12) Jonas, Samantha; Viviers, Herman; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.ENGLISH ABSTRACT: Share incentive schemes have become an important part of the remuneration package of employees in South Africa. Employers offer share incentive schemes to employees in order to attract and retain high quality workers while aligning the interests of the employees with those of the shareholders. Employees are motivated to participate in share incentive schemes due to the opportunity to invest in their financial future, as well as the opportunity to share in the economic success and growth of the employer company. Due to the increase in the utilisation of share incentive schemes to remunerate employees, the South African Revenue Service (the SARS) increased its focus on the taxation of such schemes. Section 8C of the Income Tax Act No. 58 of 1962 (the Act) was introduced by the SARS on 24 January 2005 to govern the taxation of share incentive schemes in South Africa. Prior to the introduction of section 8C, section 8A sought to tax the gains realised by employees participating in share incentive schemes, being the difference between the market value on the exercise date and the grant price. The tax liability incurred by employees in terms of section 8A did not tax the full gain eventually realised by employees upon vesting of the shares and the SARS sought to close this loophole through the introduction of section 8C to the Act. The employer company is required by the Fourth Schedule to withhold employees’ tax amounting to the gain realised by the employee in terms of section 8C of the Act. This assignment analysed the workings of the four share incentive schemes most commonly found in the South African marketplace, namely: share option scheme, share purchase scheme, deferred delivery share scheme and phantom share scheme. The current normal income tax legislation governing share incentive schemes in relation to employees was examined by considering literature contained in the Act, amendment bills and acts, case law and other material. Based on current income tax legislation, the tax implications of each of the four selected share incentive schemes was determined and compared in order to determine which of the selected share incentive schemes are most tax efficient in relation to the employee. It was concluded that the share option scheme and the deferred delivery share scheme are the most tax efficient schemes in relation to the employee. Based on case studies conducted, along with an analysis of the current income tax legislation contained in the Act, the share option scheme and the deferred delivery share scheme resulted in the lowest overall tax liability for employees. It was further concluded that employers will be required to revisit the structuring of their current share incentive schemes in order to ensure that any dividends paid to employees in terms of the schemes will remain exempt in terms of the amended section 10(1)(k)(i)(dd). The assignment includes recommendations relating to how share incentive schemes can be structured to be more tax efficient.
- ItemThe deductibility of indirect empowerment measures relating to black economic empowerment (BEE) in terms of the income tax act(2012-12) Acker, Tim; Nel, R.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.ENGLISH ABSTRACT: The requirements of broad-based black economic empowerment (‘BEE’) are set out in the BEE scorecard. When an entity incurs expenditure relating to indirect empowerment measures (i.e. the preferential procurement, enterprise development, skills development and socio-economic development categories on the BEE scorecard), it is unclear whether the expenditure will be deductible for income tax purposes (BEE Partner, 2008). The objectives of the current study are to determine whether such expenditure is deductible and to formulate best practice guidelines for the deduction of the expenditure. The best practice guidelines consist of factors that should be considered when determining whether expenditure is deductible, as well as recommendations on how to justify that such expenditure should, in fact, be deductible. The methodology used was to first consider the requirements of the BEE scorecard, the types of expenditure and the reasons for incurring expenditure towards indirect empowerment measures. The deduction of such expenditure was then considered in a general sense and specifically for each broad category of expenditure. Lastly, the best practice guidelines were formulated based on the conclusions reached. Common expenditure towards indirect empowerment measures of BEE was grouped into broad categories. The different reasons why entities incur such expenditure were identified, as the reason for incurring expenditure can influence whether it is incurred in the production of income (Van Schalkwyk, 2010b:110). It is submitted that expenditure that is excessive or that is incurred for philanthropic purposes would not be incurred in the production of income. Four issues were identified that could preclude a deduction in terms of the general deduction formula (section 11(a)) – notably, that expenditure has to be in the production of income and non-capital in nature to be deductible. In addition to section 11(a), special income tax deductions (sections 12H, 12I or 18A) and capital allowances (sections 11(e), 13sex or 15(a)) could also possibly apply, but only for certain types of expenditure and only in qualifying circumstances. The conclusions drawn as to the deductibility of expenditure are summarised as a guideline for taxpayers. The above-mentioned conclusions, along with the literature examined, were used to formulate general best practice guidelines. One such guideline is that the onus is on taxpayers to show (through one of the ways suggested) that expenditure is in the production of income. Taxpayers should also note that excessive expenditure is not in the production of income and that certain expenditure required by sector charters is more likely to be capital in nature. Furthermore, specific best practice guidelines were submitted for each broad category of expenditure and relate to, for example, the applicability of the identified special deductions and the quantification of non-monetary expenditure. The specific best practice guidelines should be considered when incurring expenditure in a specific category. In summary, even though expenditure towards indirect empowerment measures has been found to be deductible in most cases, there are exceptions of which taxpayers should be aware. The proposed best practice guidelines include guidance that could be considered before incurring expenditure towards indirect BEE measures.
- ItemGeld die gewone reëls en beginsels van wetsuitleg by die uitleg van belastingwetgewing?(Stellenbosch : Stellenbosch University, 2001-12) Taljaard, Jochemus Cornelius; Van Schalkwyk, C. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.; Davids, RicardoENGLISH ABSTRACT: For many years the view of South African courts and academics have been that the literal meaning of words is the cornerstone in regard to the interpretation of legislative provisions. This view has changed drastically over the years and academics and the courts have later accepted that the intention of the legislature is the determining factor in the interpretation of a legislative provision. In recent years the courts have also moved towards a more purposive approach in interpreting legislative provisions. Despite these developments the belief remained with some academics and especially tax practitioners that in the interpretation of fiscal legislation, the literal meaning of words remains the deciding factor in the interpretation of such legislation. In this study, the courts' approach in the interpretation of fiscal legislation, with specific reference to the Income Tax Act 58 of 1962 is investigated in order to determine whether a different approach is followed in the interpretation of fiscal legislation in contrast with the interpretation of other legislation. This study first examines the principles applicable in the interpretation of legislation in general and the developments that have taken place over the years. This is necessary in order to set a standard against which the interpretation of fiscal legislation may be measured. The study then examines the courts' approach to the interpretation of fiscal legislation and draws a comparison between the interpretation of fiscal legislation and the interpretation of legislation in general. In this regard the specific theories of interpretation as well as the presumptions of interpretation is considered in detail. From this examination the conclusion is drawn that there are no grounds for distinguishing between the interpretation of fiscal legislation and other legislation in general except for the fact that the concept of equity was never accepted and applied in the context of fiscal legislation whereas it has been in regard to other legislation. The specific reasons for this exception are also discussed in detail. The impact of the Constitution of the Republic of South Africa on the interpretation of legislation in general and fiscal legislation in particular is then considered. From this examination the inference is drawn that the Constitution has no impact on the interpretation of fiscal legislation in so far as the provisions of Chapter 2 of the Constitution are not infringed by a taxing provision.
- ItemDie inkomstebelastinggevolge van winste verdien uit beursverhandelde enkel-aandeeltermynkontrakte(Stellenbosch : Stellenbosch University, 2012-03) Engelbrecht, Bruwer Christo; Van Schalkwyk, Christiaan Jacobus; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.ENGLISH ABSTRACT: The use of derivative instruments, including single-stock futures, experienced unprecedented growth over the last twenty years. South Africa, like the rest of the world, is still experiencing extraordinary growth in the trading of these instruments. The taxation of these transactions, therefore, are of increasing practical importance. Despite this unprecedented growth, the South African tax policy makers have neglected the tax treatment of these instruments to a large extent. Due to the lack of specific legislative provisions regulating the tax aspects of these instruments, the general principles of the South African income tax law have to be applied. This gives rise to conflicting opinions regarding the tax treatment of these instruments, primarily as a result of the fact that these principles were developed long before the widespread use of derivative instruments. The lack of relevant case law in this regard is also problematic. This results in great uncertainty surrounding the tax treatment of profits from single stock futures. This research paper applies the general principles of the South African income tax law in order to determine when these profits accrue to the taxpayer and to determine the nature thereof. The introduction of capital gains tax has added yet a further dimension to the taxation of these instruments and is also considered. This research paper also considers the income tax treatment of similar instruments in Australia in order to identify useful principles that may be applied within a South African context. In light of the increasing volume and value of derivative transactions, it is imperative that clarity regarding the taxation of these transactions be obtained as soon as possible. Any reform and revised tax rules need to provide certainty to the taxpayer while remaining flexible enough to ensure that future changes in the ever-changing financial instruments environment are accommodated.
- ItemPossible tax treatments of the transfer of accounting provisions during the sale of a business and subsequent tax considerations(Stellenbosch : University of Stellenbosch, 2006-12) Kroukamp, Susan; Van Schalkwyk, C. J.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.The potential buyer of a business evaluates the attractiveness of the transaction by considering the financial status of the business being sold. In determining the financial status of a business it is more important to determine the nature of the assets and liabilities recorded on the balance sheet rather than the mere existence thereof. Included in the liabilities are accounting provisions recorded in terms of the Generally Accepted Accounting Practice (GAAP) to reflect a fair representation of the financial status. Although these provisions are made for accounting purposes, they cannot necessarily be deducted under the terms of the Income Tax Act, no 58 of 1962. The tax deductibility of accounting provisions has long been a potential contention when a business is sold. The Income Tax Act has specific sections that must be applied in determining the deductibility of accounting provisions, for example, section 11(a), which is the general deduction formula; section 23(g), which prohibits expenses not laid out for the purposes of trade; and section 23(e), which does not allow a deduction when a reserve fund is created (for example a leave pay provision). In conducting this study, seven types of accounting provision generally recorded by businesses were identified: the bonus provision, leave pay provision, warranty provision, settlement discount and incentive-rebate provision, post employment provision, retrenchment cost provision and other provisions. These provisions are discussed in view of their possible income tax deductibility, and relevant case studies were identified to confirm the possible deductibility of these accounting provisions. In this study, the transfer of accounting provisions during the sale of a business is considered for the purposes of both the buyer and seller. The tax implications for the buyer and seller are then evaluated, as well as the subsequent treatment of the accounting provisions for the purposes of the buyer. Because the wording of the purchase contract is extremely important when a business is acquired, three examples of the wording of a purchase contract are discussed as well as the income tax implications thereof. The extent of the advice given by a tax practitioner will depend on the allegiance of the practitioner (either for the buyer or seller) and will determine how the contract will be concluded. In conclusion a tax practitioner would want to assist his client to obtain the most effective tax position for the transaction and therefore each purchase contract must be reviewed on its own set of facts.
- ItemA structured technique for applying Risk Based Internal Auditing in information technology environments (with specific reference to IIA RBIA, King Report and CobiT)(Stellenbosch : University of Stellenbosch, 2005-03) Wheeler, Sonya; Boshoff, W. H.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.ENGLISH ABSTRACT: A technique that may be used to incorporate Risk Based Internal Auditing (RBIA) in the IT environment is to follow annual audit planning methodology steps. The IT infrastructure elements are linked to the business processes which they support. Their ranking are based on the risk assessments of the business process, the business process priority, the dependency of the business process on IT and the IT infrastructure element’s own risk assessment. CobiT is used as an auditing method, i.e. best practice guidance to audit against.