Browsing by Author "Mvunabandi, Jean Damascene."

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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.
Forensic auditing as a powerful tool to enhance non-government organisations’ fraud risk management: a study of selected NGOs in eThekwini region, South Africa.
(2022) Mvunabandi, Jean Damascene.; Nomlala, Bomi Cyril.; Patrick, Harold.
Financial statement fraud is of serious concern to professional auditors, funders, and regulators. Although responsibility for fraud prevention and detection falls on management and those in charge of governing entities, external auditors are likely to come under strong criticism if fraud is not detected. This study empirically investigated the relationship between forensic auditing and fraud risk management, focusing on financial statement fraud among non-government organisations (NGOs). It aimed to determine whether forensic auditors prevent, detect, investigate, and respond to the risk of financial statement fraud among these organisations. To achieve these objectives, the study explored the significance of various fraud risk factors to propose how forensic auditors could respond to this risk using proactive forensic auditing techniques. It also explored the motivation for financial statement fraud. Four research questions guided the study, and four hypotheses were tested. Thirty large NGOs in the eThekwini region, South Africa constituted the sample, and the study population was 87 staff (internal auditors, forensic auditors, managers, accountants and bookkeepers, audit committees, finance officers, Chief Operations Officers, Chief Executive Officers, and directors). Data were gathered by means of an online questionnaire and semi-structured interviews via Zoom. Structural Equation Modelling (SEM) and Confirmatory Factor Analysis (CFA) were employed to test the fitness of the model and to evaluate the independent variables. Robustness analysis was performed using Analysis of Moment Structures (AMOS) software version 27 for CFA (alongside SPSS Version 27) to estimate statistical models. Structural Equation Modelling was simultaneously used to estimate the link between fraud risk management factors, preventive fraud practices, detective fraud practices, responsive fraud practices and proactive forensic auditing techniques among NGOs. The responses to the interview questions were analysed using conventional thematic analysis via qualitative data analytic software NVivo 12. The study’s results revealed that the proactive approach to forensic auditing has a significant impact on fraud risk management among NGOs in eThekwini region. A new, holistic fraud combination theory is proposed to address the shortcomings of the fraud triangle theory and improve fraud prevention, identification, and detection, and it is recommended that NGO governance structures adopt proactive forensic audit techniques. As the first to explore financial statement fraud and the extent to which forensic auditors could assist in the NGO context, this study deepens understanding of forensic auditing as the main driver of fraud risk management among NGOs by providing field-based evidence. It also contributes to the application of critical realism, interpretivism and positivism to accounting and auditing research.