Masters Degrees (School of Accountancy)

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Addressing 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.
Addressing some of the challenges faced by small and medium-sized entities during the selection and implementation of accounting software packages
(Stellenbosch : Stellenbosch University, 2016-03) Bishop, William Arthur; Steenkamp, Len P.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accountancy.
ENGLISH SUMMARY : Alignment between an entity’s strategic business objectives and its information system (IS) has been a popular research area over the last couple of years. There is a considerable amount of literature on how to solve this alignment issue in larger entities, but limited research is available on the challenges that small and medium-sized entities (SMEs) face when having to align their strategic business objectives with their ISs. Various small generic accounting software packages are available for purchase by SMEs. These accounting packages all have functionalities that enable SMEs to keep proper accounting records; however, due to their generic nature, these accounting packages do not always have sufficient functionalities to drive the SMEs’ strategic business objectives, resulting in IS misalignment. Newly established SMEs face the challenge of both selecting the correct accounting software package at the start of their establishment and proper implementation of the selected package. The same challenge is faced by growing SMEs that are planning to replace, improve or expand their current accounting software. Not selecting the correct accounting software package and not managing the package installation and configuration processes properly will result in the accounting software not addressing the strategic business needs of the SME. These are two of the main reasons why small generic accounting software packages often fail to drive the entire business system of SMEs. The purpose of this research assignment was to review and discuss the two main challenges faced by SMEs when selecting and implementing generic accounting packages. The purpose was further to develop a mapping between strategic business objectives commonly found within SMEs and software package functionalities that SMEs can refer to during the selection and implementation of new accounting software packages. It also examined the potential of (PRINCE2) Projects in Controlled Environments as a project-management framework for application by SMEs during the implementation of new accounting software. A non-empirical approach was followed throughout this assignment, whereby a literature review was performed on strategic alignment issues faced by SMEs, the strategic business objectives of SMEs, the functionalities required for strategic alignment within SMEs and the tailoring potential of PRINCE2. It was found that in order for an SME to select the correct accounting software package, it is important that it invests time and effort in considering the software functionalities provided by the software package and maps it against its strategic business drivers to prevent failure of the package. It was further concluded that the level of innovation the SME strives towards has a direct impact on the software package functionality requirement. PRINCE2 was found to be a suitable framework for use by SMEs in the implementation of accounting software packages only if tailored properly to incorporate the specific needs of the SME and adjusted to specifically address strategic alignment issues.
Addressing the incremental risks associated with adopting a Bring Your Own Device program by using the COBIT 5 framework to identify keycontrols
(Stellenbosch : Stellenbosch University, 2014-04) Weber, Lyle; Smit, Sybil; Boshoff, W. H.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accountancy.
ENGLISH ABSTRACT: Bring Your Own Device (BYOD) is a technological trend which individuals of all ages are embracing. BYOD involves an employee of an organisation using their own mobile devices to access their organisations network. Several incremental risks will arise as a result of adoption of a BYOD program by an organisation. The research aims to assist organisations to identify what incremental risks they could potentially encounter if they adopt a BYOD program and how they can use a framework like COBIT 5 in order to reduce the incremental risks to an acceptable level. By means of an extensive literature review the study revealed 50 incremental risks which arise as a result of the adoption of a BYOD program. COBIT 5 was identified as the most appropriate framework which could be used to map the incremental risks against. Possible safeguards were identified from the mapping process which would reduce the incremental risks to an acceptable level. It was identified that 13 of the 37 COBIT 5 processes were applicable for the study.
Addressing the incremental risks associated with social media by using the cobit 5 control framework
(Stellenbosch : Stellenbosch University, 2015-04) Gerber, Petro; Steenkamp, Gretha; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: Social media offers great opportunities for businesses and the use thereof will increase competitiveness. However, social media also introduce significant risks to those who adopt it. A business can use existing IT governance control framework to address the risks introduced by social media. However a business should combine existing control frameworks for adequate and complete IT governance. This study was undertaken to help businesses to identify incremental risks resulting from the adoption of social media and to develop an integrated IT governance control framework to address these risks both at strategic and operational level. With the help of the processes in COBIT 5, this study provides safeguards or controls which can be implemented to address the IT risks that social media introduce to a business. By implementing the safeguards and controls identified from COBIT 5, a business ensures that they successfully govern the IT related risks at strategic level. This study also briefly discuss the steps that a business can follow to ensure IT related risks at operational level is addressed through the implementation of configuration controls.
Die aftrekbaarheid van werknemerverwante voorwaardelike aanspreeklikhede, met spesifieke verwysing na die verkoop of beeindiging van 'n besigheid
(Stellenbosch : University of Stellenbosch, 2010-12) Kieviet, Suzanne; Van Wyk, E.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.
AFRIKAANSE OPSOMMING: Die belastingaftrekbaarheid van werknemerverwante voorwaardelike aanspreeklik-hede, met spesifieke verwysing na die verkoop of beëindiging van ŉ besigheid, is in meegaande studie ondersoek. Dit word bevind dat in die geval van die beëindiging van ‘n besigheid, alle voorwaardelike aanspreeklikhede op datum van beëindiging van die besigheid, waarskynlik nooit vervul kan word nie, spesifiek in geval waar dit gekoppel is aan die vereiste dat ŉ werknemer op ŉ toekomstige datum steeds in diens moet wees van die besigheid. Die voorwaardelike verpligting word dus nooit vervul nie en geen betalings hoef aan voormalige werknemers gemaak te word nie. Geen aftrekking aan die voormalige werkgewer word dus toegestaan in gevalle waar verlof- of bonusbetalings gemaak word na beëindiging van die besigheid, indien die verpligting nie reeds onvoorwaardelik bestaan het voordat die beëindiging van die besigheid plaasgevind het nie. Dit word verder bevind dat in die geval waar ŉ besigheid gelikwideer word, die voormalige en voornemende werkgewer se verpligting teenoor die werknemers se voorwaardelike aanspreeklikhede verval. Verder is dit ook waarskynlik dat geen belastingaftrekking toegestaan sal word nie, omrede die voorwaardelike aanspreeklikheid nie vervul is op datum van likwidasie nie. Dit word verder bevind dat in die geval waar ŉ besigheid as lopende saak verkoop word, die voornemende werkgewer ingevolge Artikel 197 van die Wet op Arbeidsverhoudinge verplig word om alle dienskontrakte, tesame met alle regte en verpligtinge wat bestaan tydens die oordrag, oor te neem asof hy in wese in die skoene tree van die voormalige werkgewer. Voorts word die voormalige werkgewer ook gebind aan die betaling van bedrae, soos deur die verkoopskontrak bepaal, of andersins in gevalle waar die voornemende werkgewer nie die verpligting om te betaal, kan nakom nie. Beide die voormalige en voornemende werkgewer bly dus wetlik aanspreeklik vir die betaling van bedrae soos uitgestippel in die verkoopskontrak, in gevalle waar ‘n besigheid as lopende saak verkoop word. Dit word verder bevind dat die Inkomstebelastingwet ‘n belastingaftrekking moet toestaan aan die voormalige of voornemende werkgewer wat ‘n werknemerverwante-betaling maak uit hoofde van die wette soos neergelê deur die Wet op Arbeidsverhoudinge. Sodoende sal die Inkomstebelastingwet die oogmerke van die Wet op Arbeidsverhoudinge onderskraag, met gevolglike voordelige uitwerking op die ekonomie en beskerming van werknemers se werksekuriteit.
Agentskapsteorie
(Stellenbosch : Stellenbosch University, 2001-12) Du Toit, C. E. (Catherina Elizabeth); De Jager, W.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: The most basic principle of agency theory is that an individual will always serve his own interest best. According to Eisenhardt (1989) agency theory describes individuals as rational, risk averse en motivated by egotism. Agency theory also deals with the conflict that exists between different parties in an organization due to people's egoism. This self-interest can lead to goal incongruence if a person is placed in an environment where he has to serve somebody else's interest. Ownership and management vested in the same party until about 130 years ago. These roles were however separated with the development of the modem organization. The principal or owner is now represented by the shareholder and management serves as the agent. The principal thus appoints the agent to serve and manage his interest in the organization optimally. The principal's goal is the maximising of his shareholders' wealth. The agent's goal to carry out his task with the minimum effort and or to obtain maximum benefit for himself. It is thus clear that the goals of the principal and agent might often differ and this will give rise to goal Incongruence. This goal incongruence may give rise to some managerial actions which will be detrimental to optimal value of the company. The agency conflict, which is caused by man's self interest, manifests in the modem organization in a number of ways. These are referred to agency problems in this assignment. Agency problems are found both on a micro- and macroeconomical level. Agency cost is the sum of the difference between the real and optimal value of the company, the monitoring costs of the principal and the bonding costs of the agent. This cost is to the disadvantage of the principal and might even be to the disadvantage of the agent. It is thus essential that agency conflict and agency costs are reduced to a minimum. A number of measures are taken to address the agency problems and to reduce their negative effect on the organization. None of these measures will be efficient enough ifused in isolation. An optimal combination of solutions will depend on the company's specific circumstances. An empirical study was conducted to determine to what extent the agency problems manifest during the demutualisation of a big insurance business. The measures taken to address these problems were also investigated as well as the extent to which these were successful.
An analysis of Section 80A(C)(ii) of the Income Tax Act no. 58 of 1962 as amended
(Stellenbosch : University of Stellenbosch, 2009-03) Geldenhuys, Bernard; Van Schalkwyk, Linda; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.
ENGLISH ABSTRACT: In November 2006 section 103(1) of the Act was abolished and replaced by a new Part IIA, containing sections 80A to 80L, which targets impermissible tax avoidance arrangements. Section 80A(c)(ii) introduced a new concept to the South African tax law: a misuse or abuse of the provisions of the Act, including Part IIA thereof. The objective of this study was to establish the origin, meaning, application and effect of section 80A(c)(ii) of the Act. The evolution of section 80A(c)(ii) was therefore examined where after the enacted version was analyzed. It was essential to determine the origin of section 80A(c)(ii) in order to establish some point of reference from which inferences could be drawn as to the possible application and effect thereof. Case law, practice statements and articles relating to its proposed root was then examined. A ‘misuse or abuse’ of a provision, it was found, implies, frustrating or exploiting the purpose of the provision. This contention was confirmed by existing Canadian precedent. Such an interpretation, however, has a strong resemblance to the words in which the draft version of section 80A(c)(ii) was couched. It is therefore in contrast to the presumption that different words (in the enacted version) imply a different meaning. The precise meaning of the words ‘misuse or abuse’ is thus still elusive. It was established that section 80A(c)(ii) has its roots in section 245 of the Canadian Act. Section 245(4) was regarded as an effective comparative to section 80A(c)(ii) as it also contained a so-called misuse or abuse rule. The application of this rule in the Canadian tax environment required the following process: - Interpret (contextually and purposively) the provisions relied on by the taxpayer, to determine their object, spirit and purpose. - Determine whether the transaction frustrates or defeats the object, spirit or purpose of the provisions. Section 245(4) had the effect of reviving the modern approach (a contextual and/or purposive theory) to the interpretation of statutes in Canada. Reference to the ‘spirit’ of a provision (above) was found not to extend the modern approach to statutory interpretation: it does not require of the court to look for some inner and spiritual meaning within the legislation. As section 245(4) was regarded as an effective comparative to section 80A(c)(ii) it was contented that it would have a similar effect, than that of its Canadian counterpart, on the approach to statutory interpretation in South Africa. However, it was established that a modern approach to statutory interpretation was already authoritative in South Africa. This finding led the author to the conclusion that section 80A(c)(ii) could at best only reinforce the case for applying such an approach. Such a purpose for section 80A(c)(ii) was however found to be void in the light of the Constitution of the Republic of South Africa, which was enacted in 1996, and provides a sovereign authority for the application of the modern approach. It was also found that the practical burden of showing that there was a ‘misuse or abuse of the provisions of this Act (including the provisions of this Part)’ will rest on the shoulders of the Commissioner, notwithstanding section 82 of the Act.
An analysis of sections 11D(1)(A) and 11D(5)(B) of the income tax Act No. 58 of 1962 as amended
(Stellenbosch : Stellenbosch University, 2011-12) Strauss, Carien; Van Schalkwyk, C. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.
ENGLISH ABSTRACT: In February 2007 section 11D was inserted into the Income Tax Act 58 of 1962 as amended. The aim of the section was to encourage private-sector investment in scientific or technological research and development (R&D). This was an indirect approach by National Treasury to increase national scientific and technological R&D expenditure in order to complement government expenditure on the subject matter. Although section 11D provides generous income tax incentives, the interpretation thereof was found to be a hindrance in attaining the goal sought by National Treasury. This is due to the fact that this section demands a firm grasp of intellectual property (IP) law, principles of tax, and technology in general. This is clearly shown by the lapse in time (i.e. three years) between the passing of section 11D into law and the release of the South African Revenue Services’ (SARS) final interpretation of section 11D, i.e. Interpretation Note 50. The release of Interpretation Note 50 in August 2009 sparked wide-spread controversy among many a patent attorneys and tax consultants. The interpretation of the section by SARS was found by many to be so draconian that it destroyed the incentive entirely. The objective of this study is to provide greater clarity on the areas of section 11D which have been found to be onerous to taxpayers. Hence the meaning of “new” and “non-obvious” in the context of a discovery of information as eligible R&D activity1 was examined. Hereafter the ambit of the exclusion of expenditure on “management or internal business process”2 from eligibility for the incentive in the context of computer program development was examined. It was established that the meaning of “novel” and “non-obvious” as construed by IP jurisprudence could mutatis mutandis be adopted for purposes of interpreting section 11D(1) of the Income Tax Act. Therefore, information would be regarded as “new” if it did not form part of the state of the art immediately prior to the date of its discovery. The state of the art was found to comprise all matter which had been made available to the public (both in the Republic and elsewhere) by written or oral description, by use or in any other way. Information would also be regarded as non-obvious if an ordinary person, skilled in the art, faced with the same problem, would not have easily solved the problem presented to him by having sole reliance on his intelligence and what was regarded as common knowledge in the art at the time of the discovery. It was submitted that in construing the meaning of the “management or internal business process” exclusion, the intention of the lawgiver should be sought and given effect to. The Explanatory Memorandum issued on the introduction of section 11D states that the lawgiver’s intention with the section was to ensure that South Africa is not at a global disadvantage concerning R&D. The R&D tax legislation of Australia, the United Kingdom and Canada was therefore examined to establish the international bar set in this regard. SARS is of the view that the “management or internal business process” exclusion applies to the development of any computer program (with the said application) irrespective of whether the program is developed for the purpose of in-house use, sale or licensing. However, it was found that such a restrictive interpretation would place homebound computer development at a severe disadvantage when compared with the legislation of the above mentioned countries. In order to give effect to the intention of legislature, it was submitted that the exclusion provision should be construed to only include the development of computer programs for in-house management or internal business process use. Computer programs developed for the said application, but for the purpose of being sold or licensed to an unrelated third party, should still be eligible for the R&D tax incentive.
An analysis of the discretion of the SARS and the relevant factors considered following a request for the suspension of the payment of disputed tax in terms of section 164(3) of the Tax Administration Act 28 of 2011
(Stellenbosch : Stellenbosch University, 2015-12) Van Wyk, Danielle; Van Zyl, Linda; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: Section 164(3) of the Tax Administration Act gives a senior SARS official (‘the SARS’) the discretion to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors, including a list of specified factors. In this study the uncertainties regarding the discretion of the SARS and the meaning and relevance of the specified factors were examined. The objectives were to determine whether the amendments to section 164(3) addressed some of the concerns and uncertainties, to establish a basic understanding of the term ‘relevant factors’ and the impact thereof, to analyse the impact of the constitutional right to just administrative action on the manner in which the section 164(3)-discretion is exercised by the SARS, and to determine whether the ‘suspension of the payment’ of disputed tax constitutes the granting of ‘credit’ in terms of the NCA. It was established that the SARS has made several amendments to the specified factors, which resulted in some of the original concerns and uncertainties being addressed, many remaining unaddressed and creating new ones. For a factor to be considered ‘relevant’ it was determined that a close and logical sufficient connection must exist between the evidence provided by the taxpayer (factor) and the issue (request), which will make the granting of the request possible. The factor will most probably be considered with reference to all the other specific relevant factors in total. The relevance of a factor is also based upon the discretion of the SARS which adds an element of subjectivity. However, if the decision in terms of section 164(3) is unlawful, unreasonable or procedurally unfair, a taxpayer has the right to a review in terms of the PAJA. It was established that the request will form the foundation of a review application and the taxpayer therefore needs to ensure that all relevant information is included when submitting a request in terms of section 164(3). It was also concluded that a request for the suspension of payment can be equated with a credit transaction and, consequently with a ‘credit agreement’ in terms of section 8(4)(f) of the NCA. It was established that although the Tax Administration Act does contain some similarities to the relevant provisions in the NCA, the NCA can be used as guidance to simplify the process and specified factors in terms of section 164(3). The Legislator’s original intention with section 164(3) was to formalise the circumstances where the payment of tax will be required, despite objection or appeal. Based upon the existing concerns and uncertainties regarding the factors, as well as the impact of the discretion exercised by the SARS, it is however questionable whether section 164(3) in its current form endorses the Legislator’s original intention. It remains to be seen whether the Legislator will take the effect of the right to just administrative action, the unresolved concerns and uncertainties and the recommendations based on the provisions of the NCA into account in future amendments to section 164(3).
Analysis of the interaction between the income tax and capital gains tax provisions applicable to share dealers
(Stellenbosch : Stellenbosch University, 2013-12) Smit, Jacobus Gideon; Van Schalkwyk, L.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: The interaction between the income tax provisions contained in sections 9B, 9C, 11(a) and 22 of the Income Tax Act No. 58 of 1962 (the Act), and the capital gains tax (CGT) provisions of the Eighth Schedule of the Act, are complex and share dealers should approach the tax consequences of share dealing profits with caution. The objective of the assignment was to ensure that the share dealing profits of share dealers (who transact on revenue account) are taxed correctly, with specific reference to the interaction between the aforementioned provisions. This was achieved by considering tax cases, the interpretation notes of the South African Revenue Services (SARS) and commentary of tax writers. Examples of share disposals were incorporated to illustrate that consistency is required between the calculation of profits for income tax and CGT purposes. The guidelines laid down by case law to determine the revenue nature of share disposals were investigated. It was concluded that share dealing profits which are designedly sought for and worked for, either as part of a business operation or not, are of a revenue nature and taxable as such. The method of identification of shares sold as trading stock is important when calculating the income tax profit, since it is used in order to determine both which shares are sold as well as the cost of the shares sold. It was concluded that the method of identification applied in terms of generally accepted accounting practice (GAAP) is generally also acceptable from an income tax perspective. Section 9C of the Act provides a share dealer income tax relief when a ‘qualifying share’ is disposed of. Any amount received or accrued as a result of the disposal of a qualifying share is deemed to be of a capital nature, regardless of the revenue intention of the share dealer. Prior to 1 October 2007, section 9B of the Act provided similar relief to the disposal of an ‘affected share’. It was concluded that section 9C of the Act has a wider scope of application compared to section 9B of the Act. Because the proceeds received on the disposal of affected or qualifying shares are excluded from gross income, the acquisition costs previously incurred and deducted in respect of such shares must be included in taxable income. It was determined that the amount to be included in income is the actual cost of such shares and not the opening trading stock value determined in terms of GAAP and claimed in terms of section 22(2) of the Act. It was concluded that the first-in-first-out (FIFO) method of identification should be applied to determine which affected or qualifying shares have been disposed of. From a CGT perspective, it was illustrated that a share dealer loses the opportunity to choose which identification method to apply and is obliged to also apply the FIFO method in calculating the CGT base cost of the shares. It is concluded that the Eighth Schedule of the Act should be amended to clarify that the FIFO method should be applied for CGT purposes where sections 9B or 9C of the Act find application. Only then will the tax profits of a share dealer be in sync with his or her cash benefit.
The applicability of section 24I of the Income Tax Act No. 58 of 1962 to bitcoin gains and losses
(Stellenbosch : Stellenbosch University, 2018-12) Basson, Remerta; Van Wyk, Ellane; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accountancy.
ENGLISH SUMMARY : Section 24I of the Income Tax Act No. 58 of 1962 (the Act) governs the normal tax treatment of foreign currency gains and losses. In terms of section 24I(3) of the Act, both realised and unrealised gains and losses arising from units of foreign currency held are taken into account in determining taxable income. ‘Foreign currency’ is defined in section 24I(1) of the Act as any currency other than local currency. The term ‘currency’ is not defined in the Act. If the term ‘currency’ is interpreted as including cryptocurrency, section 24I of the Act could also apply to bitcoin gains and losses. National Treasury has proposed, in the Draft Taxation Laws Amendment Bill 2018, to amend the definition of ‘financial instrument’ in section 1(1) of the Act to include any cryptocurrency. The proposed amendment is in line with the view of the South African Revenue Service that bitcoin should be classified as an asset and not as a currency for normal tax purposes. This classification would preclude the application of section 24I of the Act to bitcoin gains and losses. Bitcoin gains and losses may in that case be subject to the provisions which govern the normal tax treatment of gains and losses arising from trading stock and capital assets. Prior to the introduction of section 24I of the Act, authors lamented the complexity of the normal tax treatment of foreign currency gains and losses. Accordingly, section 24I of the Act was introduced with the objective of aligning the normal tax treatment of foreign exchange gains and losses to the principles of fairness, simplicity, economic reality, current tax principles and generally accepted accounting practice. The objectives of a provision may inform its interpretation in terms of a purposive approach to interpretation. Thus, this study set out to determine whether a purposive approach to the interpretation of section 24I of the Act might indicate that the section could be applicable to bitcoin gains and losses. This is in contrast to previous studies, which employed comparative analyses to determine whether bitcoin should be classified as an asset or as a currency for normal tax purposes. A qualitative research approach was followed, which took the form of a desktop literature review. Secondary data were collected and analysed to determine whether the application of section 24I of the Act to bitcoin gains and losses could further the objectives of the provision. The study found that the application of section 24I of the Act to bitcoin gains and losses may lead to the furtherance of the current tax principles of neutrality and simplicity and may align the normal tax treatment of bitcoin gains and losses to generally accepted accounting practice. Therefore, a purposive approach to the interpretation of section 24I of the Act might indicate that the section could be applicable to bitcoin gains and losses. The findings of this study suggest that the current normal tax treatment of bitcoin gains and losses, as well as the amendments proposed in the Draft Taxation Laws Amendment Bill 2018, may undermine current tax principles. The study further revealed that the current normal tax treatment may lead to a tax anomaly. Based on these findings, it is recommended that National Treasury reconsider its position on bitcoin and other cryptocurrencies.
Applying COBIT in an ERP environment, with specific reference to Qmuzik
(Stellenbosch : University of Stellenbosch, 2006-12) Kieviet, Freda; Boshoff, W. H.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.
ERP applications have evolved into enterprise-wide applications, which are generally acknowledged today as a critical component in an organisation’s information strategy. When implementing an ERP application, the control and governance of all IT processes are critical to ensure that value is delivered, risks are managed and that the investment in IT (ERP) delivers a reasonable return. It should, therefore, be important to focus on mitigating IT process risks that have an impact on the ERP environment, so that the level of residual risk is acceptable and aligned with the business objectives. This assignment focuses on using the generally accepted IT framework, COBIT (Control Objectives for Information and related Technology), as governance and control model. The criticality of each COBIT control objective (IT process) is evaluated by applying the COBIT control objectives in an ERP environment. Specific reference is also made to Qmuzik as an ERP application. By applying COBIT in an ERP environment, the most critical IT processes applicable to ERP are identified, in order to ensure that the minimum process controls for these IT processes are designed and implemented.
Applying PRINCE2 project management disciplines to address key risks in ERP System Implementation Projects
(Stellenbosch : University of Stellenbosch, 2007-03) Plotnikova, Svetlana; Boshoff, W. H.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.
The successful implementation of an Enterprise Resource Planning (ERP) System can help an organisation to redefine its business processes and enhance its competitive advantage. An ERP System Implementation is a transformation project, which changes the way an organisation thinks and acts about its business. An ERP System implementation is also a complex endeavour, and as such, it requires rigorous risk management. The understanding and management of risks relevant to ERP System Implementation Projects are critical in order to ensure that the project delivers on its objectives within the specified budget and timelines, and eventually realises the envisaged business benefits. The purpose of this study is to discuss how key risks relevant to ERP System Implementation Projects could be addressed by applying project management disciplines derived from the PRINCE2 (PRojects IN Controlled Environment) project management methodology. This methodology was developed by the Office of Government Commerce in the United Kingdom. This study also provides a framework that could be applied at the outset and during an ERP System Implementation Project by business management, to understand the risks (“what could go wrong?”) and project management disciplines that should be applied to address these risks (“what must go right?”). This framework was derived by: • Identifying key risks relevant to ERP System Implementation Projects; • Mapping these key risks onto SAP Implementation phases to highlight where these risks could materialise in the SAP Implementation process; • Then mapping these key risks across PRINCE2 project management processes and SAP Implementation phases by creating the SAP Implementation Key Risks Map; and finally • Providing a detailed description of how to apply PRINCE2 project management disciplines to address each risk in the SAP Implementation Key Risks Map.
Die argumente ten gunste van die standaardstelling van handhaafbare verdienste en riglyne daarvoor
(Stellenbosch : Stellenbosch University, 2002-03) Steenkamp, L. P; Van Schalkwyk, C. J.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: Earnings per share and headline earnings per share are two popular performance measures, in spite of a number of shortcomings. This assignment argues that an additional performance measure ought to be disclosed in the financial statements, namely maintainable earnings. The objective of maintainable earnings is to give an indication of the core earnings of the company, excluding the effect of non-recurring items that are not expected to influence the financial results in future years. The reason for this performance measure is mainly based on the needs of the users of financial statements and the application that it finds in their analises. There is circumstancial evidence that shows that users want an indication of maintainable earnings per share. It is also argued that the disclosure of maintainable earnings is in the interest of the users of financial statements, as they do not necessarily have the knowledge or time to make the necessary calculations for themselves. The recommendations made are, among others, that non-recurring items be excluded from the calculation of headline earnings and that changes in accounting estimates be done retrospectively. Recommendations for comprehensive disclosure are also made to be of help in the evaluation of earnings.
Assessing the normal tax implications of a home swap for a resident owning property in South Africa
(Stellenbosch : Stellenbosch University, 2017-12) Zietsman, Magdel Elizabeth; Herron, Andrea; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accountancy.
ENGLISH SUMMARY : The concept of home swapping dates to the 1960s and is therefore an established practice. Participating members exchange reciprocal rights, entitling such members to accommodation (in each other’s homes) at predetermined dates for a specific period. The rapid and prodigious strides made in technological advancement have eliminated traditional barriers to international trade. Consequently, the practice of home swaps has been highlighted as a core contributor to the sharing economy. The conventional concept of home swapping has been revised to exploit the upsurge in the current innovative business environment. Exchanges can be facilitated via points, rights or cash. The essence of such an exchange can be reduced to a short-term rental agreement, with distinction only being made to the recompense: an incorporeal non-cash benefit (points/rights) or cash. Such rights/points fall within the ambit of barter trade, which in turn finds itself within the realm of gross income. However, the South African Revenue Service does not explicitly address the normal tax treatment of the incorporeal non-cash benefit (points or a right) collected. Therefore, the average South African taxpayer, lacking tax expertise, might inadvertently contravene the Income Tax Act No. 58 of 1962 (hereafter referred to as the “ITA”). Contributing to the convolution of assessing the normal tax repercussions for home swaps is the time at which the benefits accrue, the valuation of such benefits, and the influence of cross-border transactions. The principal aim of this study was therefore to address the normal tax implications for a South African resident, in possession of property within South Africa, upon receipt or accrual of the benefit of a successful home swap. The gross income definition of the ITA, in conjunction with relevant South African case law and legislation, was evaluated to elucidate the recommended normal tax treatment for home swap transactions (hereafter referred to as “swaps”). In addition, the terms and conditions of the two most prominent international home swap programmes, Love Home Swap and Home Exchange, were analysed in the context of the aforementioned legislation and case law. The study concludes with an examination of Australian tax legislation and case law as a source of counsel from the perspective of the Australian Tax Office. Home swap benefits, regardless of the currency, were found to be indistinct items of gross income for which no exemption exists in the current ITA. The time at which a normal tax burden arises is dependent on the swap type, the order in which participants consume their benefits and the terms and conditions inherent to affiliation with specific home swap programmes. Valuation of non-cash benefits is more multifaceted than appraisal where compensation is in cash. Valuation is primarily contingent upon the time at which normal tax is levied and whether the recompense is in cash or kind. An explanatory memorandum or augmentation of the ITA with additional sections, is therefore proposed. Such an addition to the ITA will instruct taxpayers and reduce the forfeiture of tax revenues due to inadvertent non-compliance.
An assessment of the comparability of financial reporting by South African long-term insurers
(Stellenbosch : Stellenbosch University, 2004-12) Van den Berg, Johannes Petrus; Von Wielligh, S. P. J.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting.
ENGLISH ABSTRACT: Existing long-term insurance financial reporting practices are heavily based on regulatory foundations. Although the reporting requirements of the long-term insurance industry are unique, there is currently no comprehensive, up to date Financial Reporting Standard in South Africa for long-term insurers. The demand for increased disclosure in the financial statements of long-term insurers increases the importance of the basic accounting principles for these companies as embodied in the Framework for the Preparation and Presentation of Financial Statements, namely comparability, relevance, accuracy and understandability of financial reporting. The SAICA Long-Term Insurance Interest Group discussed the withdrawal of AC121 Disclosure in the Financial Statements of Long-Term Insurers and the replacement thereof by way of other guidance. Ultimately the Accounting Practices Committee has firmly stated that it will not tolerate the ongoing implementation of AC121 because it contradicted a number of other accounting statements and indeed overrode those statements. With this in mind and taking into account the program of harmonising South African accounting standards with International Accounting Standards, it insisted that AC121 be withdrawn and replaced by guidance notes only. The current lack of authoritative South African guidance on financial reporting by long-term insurers results in the potential compromise of the basic qualitative characteristics of comparability and relevance in their financial statements, as certain disclosures are voluntary rather than required. The aim of the research was to assess the impact of the lack of authoritative South African financial reporting guidance relating to South African long-term insurers on the basic financial statement characteristic of comparability. A literature study was undertaken and a checklist for disclosure in the long-term insurance industry was drawn up. The objective was to highlight areas of noncomparable disclosure for which financial reporting standards should be created in order to provide guidance on financial reporting by South African long-term insurers and, where possible, to suggest guidance. Financial statements of selected South African long-term insurers were reviewed and "measured" against the checklist in order to make an assessment of comparability. Currently the disclosure of industry-specific items differs significantly amongst long-term insurance companies in South Africa. The comparability test (on information disclosed in the 2002 annual reports of the selected companies) and the research done on industry-specific items identified by this test indicated the extent of this non-comparability within the South African long-term insurance industry. In view of the recent withdrawal of AC121 and the results of the comparability test, there is reason to believe that each long-term insurer in South Africa discloses what it believes is right and what it believes the industry is required to disclose. This results in significant non-comparability between the financial statements of South African long-term insurers. The author recommends that a long-term insurance industry accounting statement in the AC500 series should be issuéd, which should provide the appropriate guidance not only to preparers of financial statements, but also to other users of financial statements in the long-term insurance industry, until such time as the international accounting project relating to long-term insurers is complete. Some work will be required to update and/or amend a "new AC121" for the AC500 series.
B2B and the supplier : preventing repudiation of orders in an open account system
(Stellenbosch : University of Stellenbosch, 2003-12) Butler, Rika; Boshoff, W. H.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy.
Belasbaarheid van klientelojaliteitsprogramtransaksies in Suid-Afrika
(Stellenbosch : Stellenbosch University, 2012-03) Brink, Sophia M.; Viviers, H.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy..
ENGLISH ABSTRACT: Client loyalty programmes are a common phenomenon in the South African market. Despite the fact that client loyalty programmes have been prevalent in South Africa since the 1980‟s, the South African Revenue Service has issued no guidance on the treatment of client loyalty programme transactions in the hands of the consumer. Benefits received in the form of goods, services or discounts from a client loyalty programme are not subject to normal South African income tax based on the current practice in South Africa. The main objective of this study was to determine whether or not the current practice applied in South Africa is correct. In order to obtain a better understanding of the functioning of client loyalty programmes a selection of the most popular client loyalty programmes in South Africa was made and the terms and conditions of these respective client loyalty programmes were analysed. Taking into account the way client loyalty programmes function, the taxability of client loyalty programme transactions were reviewed and analysed with reference to relevant tax law sections and case law. In order to investigate a client loyalty programme transaction as a whole, the tax treatment of the supplier that grants points or miles was included in the scope of the study. The tax treatment of the supplier could potentially shed more light on the tax treatment of the consumer who earn points or miles. The consumer and the supplier have possible income tax (which includes capital gains tax) and VAT implications, consequently both the income tax treatment and the VAT treatment for the consumer and the supplier were considered. In addition, the tax treatment of client loyalty program transactions in South Africa was compared with a country (Australia) whith similar tax laws to South Africa and income tax principles or practices were identified which might be useful within a South African context. It was found that client loyalty programme transactions satisfy the general gross income definition and that the value of the transaction must be included in the consumer's gross income. Only when employees earn points or miles in their own name by virtue of goods or services purchased by their employer, a possible employees‟ tax obligation arises. It was found that within an employee/employer relationship, the requirements of paragraph (c) and paragraph (i) of the "gross income" definition are not met due to the fact that there are no causal connection or direct relationship between the benefit received and the services rendered and also because the client loyalty programme supplier is not an associated institution of the employer. Australian case law confirms the above conclusions in a South African context. The VAT implications of a client loyalty programme transaction occur for the consumer when the consumer exchange points or miles for benefits at a programme partner and not when the points or miles are earned. Capital gains tax implications will only be applicable if a consumer disposes of a capital asset obtained in terms of a client loyalty programme transaction. It was found that the current practice in South Africa of not taxing benefits received from a client loyalty programme is incorrect. To implement the taxability of client loyalty programme transactions in South Africa it is recommended that SARS should formulate guidelines regarding the tax treatment of client loyalty programme transactions. The study includes recommendations to facilitate the implementation of the taxability of client loyalty programme transactions.
Belasting op buitelandse dividende in die Republiek van Suid-Afrika
(Stellenbosch : Stellenbosch University, 2003-03) Van Wyk, Ellane; Van Schalkwyk, C. J.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Accountancy
ENGLISH ABSTRACT: The introduction of section 9E in the Income Tax Act, No.58 of 1962 (hereafter “the Act”) became effective on 23 February 2000. The main reasons for the introduction of this was, inter alia, to broaden the tax base and to phase in the residency basis of taxation. Consequently are the foreign dividend rules of section 9E interrelated to the foreign income rules of section 9D, being the application of the residence basis of taxation. The main objective of this study is to investigate the taxation of foreign dividends in the Republic of South Africa. The introduction of section 9E saw new terminology introduced, which need analysis. This analysis is made possible by supplying the definitions from the Act, as well as making use of national and international case law. Further investigation is also done as to the relevance of section 9E to other sections in the Act, relevant anti-avoidance rules regarding foreign dividends, the effect of section 9E on investment income from tax havens, with specific reference to natural persons, the effect of taxation of foreign dividends on the migration- and investment decisions of non-residents, relief provided regarding double taxation and section 9E’s effect on secondary taxation on companies. Lastly, the collection of taxation on foreign dividends is investigated.
Die belasting van buitelandse dividende in die Republiek van Suid-Afrika
(Stellenbosch : Stellenbosch University, 2003-04) Van Wyk, Ellane; Van Schalkwyk, C. J.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy.; Davids, Ricardo
ENGLISH ABSTRACT: The introduction of section 9E in the Income Tax Act, NO.58 of 1962 (hereafter "the Act") became effective on 23 February 2000. The main reasons for the introduction of this was, inter alia, to broaden the tax base and to phase in the residency basis of taxation. Consequently are the foreign dividend rules of section 9E interrelated to the foreign income rules of section 90, being the application of the residence basis of taxation. The main objective of this study is to investigate the taxation of foreign dividends in the Republic of South Africa. The introduction of section 9E saw new terminology introduced, which need analysis. This analysis is made possible by supplying the definitions from the Act, as well as making use of national and international case law. Further investigation is also done as to the relevance of section 9E to other sections in the Act, relevant anti-avoidance rules regarding foreign dividends, the effect of section 9E on investment income from tax havens, with specific reference to natural persons, the effect of taxation of foreign dividends on the migration- and investment decisions of non-residents, relief provided regarding double taxation and section 9E's effect on secondary taxation on companies. Lastly, the collection of taxation on foreign dividends is investigated.

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