Browsing by Author "Lathleiff, Charmaine."

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A qualitative analysis of auditors' responsibility in South African corporate scandals.
(2023) Govender, Kenthran.; Lathleiff, Charmaine.
For time immemorial, the audit profession has faced backlash from the users of the annual financial statements (AFS) for not doing enough. The calls for the auditor to do more come at times when the entities being audited go into liquidation, business rescue or become corporate failures and these entities were audited with no issues being detected and reported to the users in the audit report. This resulted in financial losses to the users of the AFS who made economic decisions based on the AFS that were audited. The response by auditors is often that it is not their job to prevent corporate scandals or to detect fraud. The role of the auditor in contributing to the corporate scandals not being detected and reported was explored in this study. This study employed a qualitative document analysis approach to analyse the contents of documents relating to the performance of the audit on corporate scandals that occurred in South Africa since 2000 and for which information on the performance of the audit was publicly available. A total of three corporate scandals were explored to determine the contribution of the auditor to the corporate scandal not being detected and reported. A self-developed index was used to categorise the findings into the standard of audit work performed to answer the research questions and achieve the research objectives. It was found that in all three corporate scandals that were analysed, an inappropriate audit opinion was issued and therefore, an audit failure existed. Further, it was found that the audit partner was not independent and detected the material misstatements in the AFS but failed to report the misstatements in the audit report in all three instances. This study sought to provide an understanding of the contribution of the auditor to the corporate scandal. This study provided insight to the role of the auditor in not detecting and preventing corporate scandals and specifically where the problem lies. To the best of the author's knowledge, this study was the first study that explored the contribution of the auditor to corporate scandals not being detected and reported. Future research could explore the role of auditors in more corporate scandals as more information becomes available as well as exploring the role of auditors in corporate scandals in other countries.
Financial accounting as a powerful tool to enhance NGOs' performance case study: Zoë-Life South Africa.
(2018) Mvunabandi, Jean Damascene.; Lathleiff, Charmaine.
Many non-governmental organisations (NGOs) in South Africa and elsewhere do not follow the International Financial Reporting Standards (IFRS) for Small and Medium-sized Entities (SMEs). There is thus no standardised process in their financial and accounting practices and preparations for financial statements cannot be compared across different NGOs. This has funding implications as organisations that do not comply with donors’ financial reporting requirements find it difficult to access financial support. However, it is not clear how the IFRS for SMEs can be used to enhance their performance. While many studies have been conducted on the use of the IFRSs among for-profit organisations, there is a paucity of such research in relation to the NGO sector. This study investigated the use of financial accounting in enhancing NGOs’ performance. Drawing on the literature in this field, a case study of a large NGO, Zoë-Life based in Durban, in KwaZulu-Natal, South Africa was conducted. The financial accounting system used by this organisation was examined in order to identify its strengths and weaknesses and offer recommendations for improvement. A qualitative approach was adopted and semi-structured interviews were conducted with 24 purposively selected respondents to capture their feelings, thoughts, and attitudes on the financial accounting system at Zoë-Life South Africa. Employees involved in accounting and finance, and projects/programmes and management were targeted. The data gathered by means of interviews were supplemented by a review of internal organisational documents. Thematic content and transcript analysis were employed to analyse the data. This study found that despite adopting accounting and financial policy and procedures, Zoë- Life finds it difficult to maximise its financial performance due to two major limitations, namely, failure to fully comply with IFRS for SMEs in South Africa, and a lack of financial support from the government. It is therefore recommended that Zoë-Life-South Africa employ qualified accountants and fully adopt the IFRS for SMEs. This would improve performance, authenticity, and accountability and ensure that the organisation complies with both donors and government’s requirements in order to secure sustained financing and promote the country’s development agenda. The study also recommends that Zoë-Life-South Africa procures the services of recognised audit firms in order to boost donor confidence. Finally, recommendations are made for further research.
Imagining an authentic workplace using simulation: exploring simulation pedagogy in auditing education.
(2019) Lathleiff, Charmaine.; Suriamurthee, Moonsamy Maistry.
Over the last forty years, there have been frequent calls for a change in the way that accounting programmes are presented at higher education institutions. Central to this argument is the gap that exists between what accountants and auditors do in practice and what accounting education teaches. This gap may be attributed in part to students’ inability to apply their theoretical knowledge in a practical real‐like setting. Furthermore, most accounting students have had limited exposure to the business world, leaving them with little context in which to apply their theoretical knowledge. Coupled with a schooling background that encouraged rote learning rather than the development of a deeper understanding of concepts and principles, students often adopt a surface, rote‐learning approach that does not promote deeper understanding either. In response to calls for a more practical approach to teaching and learning in accounting, the South African Institute of Chartered Accountants recently introduced a competency framework that is built on the principles of experiential learning, calling for students to be able to apply their theoretical knowledge in a practical real‐world‐like setting. Given the gap that exists between students’ theoretical knowledge and graduates who are able to apply this knowledge immediately upon entering the workplace (Rudman and Terblanche, 2012), there appears to be the need for a teaching model that moves away from the typical lecturing model. Such a model should allow students to be more actively involved in the learning process, and encourage students to develop skills that will allow them to apply theoretical knowledge and develop pervasive skills for use in such settings. Some educators have turned to simulation to assist with this. To address this gap, and against the backdrop of attempts to reform accounting education, an in‐depth qualitative case study was conducted, exploring students’ experiences of simulation pedagogy in a final year undergraduate Auditing module at the University of KwaZulu‐Natal. The study’s use of multiple data sources, including focus group interviews, individual interviews, written questionnaires, and reflective journals yielded rich insights into the phenomenon. Purposive sampling was used to select twenty participants from the Westville campus student cohort. The data was analysed using a content and thematic analysis approach. Confirming the literature, students experienced the active nature of the simulation favourably. In addition, they reported that the simulation afforded them the opportunity to grapple with its contents and learn from mistakes made during the process; this quality of simulation provided the key to unlocking a deeper understanding of the auditing concepts and principles and the practical application thereof. The visual aspect of the simulation allowed students to create mental images and motion pictures of the procedures performed, which could subsequently be retrieved for later referral in a similar situation, and in the development of abstract concepts. Although the simulation had been received favourably by the study’s student participants, there were aspects of the pedagogy that met with resistance. Many of the students did not respond favourably to the call for group work. Although the students agreed that simulation pedagogy could be valuable to their development for their future careers, they did not believe that it would assist them to pass their examinations. They cited the manner in which assessments are structured, and argued that a more lectureintensive, rote‐learning approach was required for the current examination structure. A unique contribution of the study to accounting education literature was its highlighting of the underlying factors that impact students’ ability to learn and develop their understanding of auditing concepts and principles through audit simulation. A further unique contribution of the study to accounting education literature was the researcher’s use of self‐study, as well as an introspective reflection of her role as facilitator. This approach provided an opportunity to reflect on the effectiveness of the simulation, as well as consider possible ways to strengthen teaching practice in simulation‐led learning.