Browsing by Author "Nomlala, Bomi Cyril."
Now showing 1 - 8 of 8
- Results Per Page
- Sort Options
Item The corporate governance practices of audit committees in the KwaZulu-Natal local government municipalities.(2020) Mqadi, Siphiwe Freddy.; Nomlala, Bomi Cyril.; Mkhize, Msizi Vitalis.For several decades, the Audit Committee has been a subject of substantial research interest in developed countries, including the United States of America, the United Kingdom and Australia. However, in emerging economies, Audit Committee remains a relatively new topic with their current practices not ideal for municipalities to fully benefit from them, as their contribution remains an illusion to communities. The problem derived from the comprehensive academic literature is that Audit Committees in the public sector are not deemed to be an effective instrument (governance structure) of the governing body because the practices culminating in good corporate governance are not understood and supported by the governing bodies, or that the Audit Committees themselves are not cognisant of their practices, are not effectively constituted, or take on responsibilities outside of their remit. The study investigates the corporate governance practices of Audit Committees in KwaZulu-Natal local government municipalities, a public sector sphere. The primary data was collected through questionnaire surveys and supplemented with semistructured interview surveys from four distinct (although significant) sample groups (i.e., Audit Committee Chairpersons, Municipal Managers, Chief Financial Officers, and Internal Auditors). The study employed a sequential explanatory mixed-methods approach. Data were analysed using -Statistical Package for Social Sciences (SPSS) for quantitative data Semi-structured interviews were transcribed and analysed qualitatively. The study emphasises the effectiveness of Audit Committee, which can execute its oversight role and responsibilities in relation to the quality of audit in the public sector. More specifically, the observations made in the study include: The lack of guidelines on minimum expertise (qualifications and “appropriate experience”) of Audit Committee members in the legislation creates room for wrong persons to be Audit Committee members; communities in KwaZulu-Natal local government have little to no knowledge of Audit Committees and their oversight roles; the municipal administration does not provide proper support for Audit Committees to discharge their duties; and although the Audit Committees are playing an essential role in some areas including financial reporting, external auditing, and internal auditing, there is a still considerate scope where the Audit Committees can play a more proactive and robust role. The study concludes by accentuating the need for Audit Committee effectiveness in KwaZulu-Natal local government, which includes: The adoption of a corporate governance framework (based on standardised sound governance principles) that will address the uniqueness of the local government sphere through a code of corporate governance and a corporate governance framework; strengthen municipal leadership to ensure that leaders possess official skills to enable them to realise the vision of the institution; promulgation of codes of ethics for local government to deal with problems of ethics, transparency, and accountability, and offer measures on non-compliance to this code of ethics; making financial sustainability center-stage of each municipality; and implementation of the municipal intervention (including local participatory governance) in a way it was initially conceived and written.Item Financial capability, financial socialisation and professional skills of Accounting students studying in KwaZulu-Natal universities.(2019) Nomlala, Bomi Cyril.; Sibanda, Mabutho.The global discourse on financial capability and financial socialisation has gained momentum in recent times. Professional skills gradually become an issue that prospective employers say most graduates are missing. This has aroused policymakers and academics’ interest in the importance of financial capability, financial socialization and professional skills in maintaining economic and financial stability. The global financial crisis of 2007/2008 was a consequence of the lack of such capability. At local and international level, much attention has been paid to financial capability and little has been done on financial socialisation and professional skills, especially when it comes to financial decision making and related skills. Both young and old have been affected by poor financial decision making which has negatively affected the economy. What further complicates the poor financial decision making is the fact that there is also bad influence coming from external sources and lack of requisite skills for sustainability. However, it remains unclear whether university students enrolled in financially related courses, particularly accounting students in the KwaZulu-Natal Province of South Africa, have higher financial capability levels as measured by financial knowledge, financial attitudes, numeracy skills and financial behaviour. It also remains an unknown factor whether what role external factors play in financial decision measure by parental influence, peer influence and social media play a critical role in the financial decision making. It is also not known whether students studying for accounting degrees in professionally accredited institutions are more financially capable than their counterparts in non-accredited institutions. Finally, there is a lack of clarity on whether financial knowledge, numerical skills, financial attitudes and financial behaviour as components of financial capability can be influenced by financial socialisation. This study was motivated by the existence of these grey areas in the current literature. It aimed to provide empirical evidence on these issues that will inform curriculum development and policy formulation on financial literacy matters in South Africa. Self-administered questionnaires were utilised to collect primary data from undergraduate accounting students studying at the University of KwaZulu-Natal (UKZN), Mangosuthu University of Technology (MUT) and Durban University of Technology (DUT). The Statistical Package for the Social Sciences (SPSS 25) was used to analyse the data. Descriptive statistics, Bivariate regression analysis and One-way Analysis of Variance (ANOVA) were employed to investigate the financial capability of accounting students and confirmatory and exploratory factor analysis was used to identify the factors that influence such capability. Cross Tabulation and Regression analysis were used to ascertain the relationship between level of study and financial capability and factor analysis was employed to determine the factors that influence the accounting students’ financial capability, financial socialisation and professional skills. Regression analysis was also used to evaluate the difference in professional skills and financial capability between UKZN (SAICA accredited) and DUT and MUT (non-SAICA accredited). Finally, Chi-square was employed to establish the relationship among the financial capability, financial socialisation and professional skills of accounting students. The results revealed that more of the respondents were female than male. The overall analysis of the financial capability of the accounting students indicated that most of the respondents (n=1416; 89.5%) have high financial capability. However, only (n=229; 14.5%) were found to have high levels of financial knowledge. With (n=1513; 95.6%), (n=1286; 81.3%), and (n=1394; 88.1%), it was found that most of the respondents have positive financial attitudes, good financial behaviour, and high numeracy skills, respectively. The computations in relation to financial socialisation and professional skills showed that most of the respondents are not influenced by social media, while most have excellent professional skills, with (n=1149; 72.6%) and (n=1506; 95.2%), respectively. The financial capability of the accounting students is high compared to the results of previous studies conducted among the general population. However, the results for financial knowledge (a component of financial capability) are low, which is consistent with the findings of other studies. The finding that financial attitudes, financial behaviour and numeracy skills significantly influence financial capability is a unique feature of this study, as it has not been reported in the literature reviewed. As expected, the numeracy skills of the accounting students were high compared to previous research. Nonetheless, much remains to be done to improve the financial knowledge of students in general and accounting students in particular.Item Financial development, economic freedom, innovative facilities, economic wellbeing and Inclusive finance in Sub-Saharan Africa.(2023) Nutassey, Victoria Abena.; Sibanda, Mabutho.; Nomlala, Bomi Cyril.This thesis presents three empirical papers that seek to improve inclusive finance and economic wellbeing in Sub-Saharan Africa (SSA). Employing a generalized method of moment for 30 SSA countries: The first paper concerned itself with the role of regulation in the relationship between financial development and inclusive finance. It found a significant positive direct effect of financial development on inclusive finance and a significant positive direct influence of regulation on financial inclusion, but found a significant positive role of regulation in the relationship between financial development and inclusive finance up to a threshold of 6.3354, above which regulation negatively modulates. This suggests that when regulation exceeds that threshold of 6.3354 in SSA, it subsequently hinders the financial sector from rendering enough services that can help improve inclusive finance. Hence, policymakers should always check the mean of their economies' regulations against the threshold of 6.3354 before deciding whether to be more restrictive or not. Also, Paper two sheds light on the collaborative role of innovative facilities and economic freedom in inclusive finance. The study recorded that improving economic freedom promotes financial inclusion while expanding innovative facilities in SSA inhibits it. Again, innovative facilities improve the impact of economic freedom on inclusive finance in SSA but subsequently diminish the effect of economic freedom on inclusive finance after certain thresholds. This implies that in SSA, innovative facilities-induced freedom-inclusive finance is relevant only when it has not covered certain thresholds because undesirable results are revealed after the thresholds. Thus, technical and financial knowledge should be enhanced in addition to lowering the cost of using innovative facilities to access financial services to prevent negative influence after the thresholds. Paper three assessed the complementary role of economic freedom on the influence of inclusive finance on economic wellbeing. The findings revealed that financial inclusion enhances the wellbeing of residents, economic freedom improves the wellbeing of the populace and a free environment maximizes the role of inclusive finance on economic wellbeing in SSA. Hence, less restrictions are recommended to be adopted by policymakers in SSA when it comes to enhancing financial inclusion's influence on economic wellbeing.Item 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.Item Impact of country risk and macroeconomic factors on South African housing market segments under different regimes.(2021) Khumalo, Mandy Zama.; Nomlala, Bomi Cyril.; Muguto, Hilary Tinotenda.The housing property market in South Africa contributes to economic growth and attracts foreign investors, however, the market has fallen victim to price bubbles. Moreover, the South African housing market can be affected by various risk factors. The purpose of this study is to investigate and compare the presence of price bubbles across the South African housing segments, and to conduct an empirical analysis of the effects of country risk and macroeconomic factors on the South African housing market. The GSADF unit root test was employed to investigate the presence of price bubbles in the South African small, medium, and large houses. The Markov regime-switching of conditional mean model was used to evaluate the effects of financial, economic, and political risk factors of country risk on housing prices of different segments in bullish and bearish market conditions. The influence of macroeconomic factors namely, employment, households’ debt-to-disposable income ratio, and money supply growth rate on different housing segments in bullish and bearish market conditions was examined using the Markov switching vector autoregressive model. The study was conducted based on 263 monthly time-series data from January 1995 to November 2016. The results showed that there were five periods of explosive bubbles in the small housing segment, three periods of explosivity in the medium housing segment, and four periods of explosive bubbles in the large housing segment. In terms of the effects of country risk components on the three housing indices, it was found that the small house price index was significantly affected by economic risk in a bullish market condition whereas, the medium house price index was significantly influenced by financial risk and political risk in a bearish market condition. Moreover, the large house price index was significantly affected by financial risk and political risk in a bullish market condition. In terms of the impact of macroeconomic factors on housing prices, it was found that employment, household debt-to-disposable income ratio, and money supply growth rate have a significant influence on the three housing indices. This study concluded that the existence of price bubbles in the housing market differed across the three housing segments, and that the response of housing prices to shocks in country risk components and macroeconomic factors varied across the three housing segments and across the two market conditions. Therefore, this study presented the first comparison of price bubbles in the housing market and the response of the three housing segments to shocks in country risk components and macroeconomic factors in different market conditions.Item The implementation of mandatory audit firm rotation in KwaZulu-Natal.(2021) Aminu, Munkaila.; Baldavoo, Kiran.; Nomlala, Bomi Cyril.The study aimed to examine the perceptions of audit experts concerning the influence of mandatory audit firm rotation (MAFR) on audit independence (AI), audit quality (AQ) and audit reform in the province of KwaZulu-Natal (KZN). Stakeholders concerns were considered regarding reporting irregularities that are important to those who understand the dynamics of the audit process and the relevance of audit reforms. In addition, it examined the logical connection between AI, AQ and MAFR by gathering 102 opinions of audit experts from Tier 2 audit firms and two public institutions about the readiness of the policy in the jurisdiction of Independent Regulatory Board of Auditors (IRBA). The study used descriptive and inferential statistics to understand the impact of the policy on reforms. The views of role players with in-depth knowledge and experience in the auditing industry were vital ingredients of the study. Due to the distinctiveness of the study, the results were two-fold. Firstly, the descriptive statistics provided a general overview of the respondents’ opinions. The majority of respondents agreed that MAFR implementation would strengthen AI and AQ, thereby validating the initial position of the IRBA. In addition, most participants agreed that the ramification of the imposition of additional cost could not be ignored. However, there were conflicting results on the effect of audit reforms on market concentration. The majority of respondents could neither agree nor disagree that there would be a decrease in market concentration. While most respondents agreed that the rule would promote government policy on transformation and create more opportunities for tier 2 audit firms to penetrate other markets, provided they had the capacity and competency to audit them. Moreover, the utilization of SPSS on ordinal logistic regression also found that the probability of a decrease in the progress of audit reforms are significantly higher when MAFR is in place, and a non-significant positive predictor of MAFR would increase AI, AQ and audit reforms. Conclusively, the study, recommends future studies should broadly include registered auditors and academics from institutions and firms in different South African provinces to obtain diverse views about pre-and post-implementation of the rule in 2023 to compare the effects of the policy on AQ and AI.Item Mandatory audit firm rotation: a student perspective.(2019) Gwala, Msizi Cedric.; Nomlala, Bomi Cyril.The purpose of the research project was to obtain an understanding of student’s perception of Mandatory Audit Firm Rotation (MAFR). The perception is determined based on the impact students consider MAFR to have on auditor independence, audit quality and other aspects of the auditing profession and practice are considered. A theoretical framework for the auditing profession and practice as well as MAFR is outlined, considering the role conflict theory, the audit expectation gap, economic theories of regulation and the living law of auditing. Literature currently available on audit firm rotation shows a mixture of both a positive and negative impact resulting from the implementation of MAFR on independence, quality and other aspects. The study follows a post-positivist research paradigm which informs the quantitative approach in addressing the objectives of the project. The population for the study is defined as auditing students at the universities of Zululand and KwaZulu-Natal (determined to be 1 619). Those in attendance at a pre-determined auditing lecture time slot or session were handed out the questionnaire for completion. A total of 413 questionnaires were collected, coded and captured for analysis. The data was then analysed using descriptive and inferential statistics to determine the perception of students on MAFR. Other comments on MAFR, solicited from participants were summarised as part of the data analysis. The study concludes that the majority of students believe that the implementation of MAFR would primarily yield positive outcomes on independence, quality and other aspects and are thus can be considered to be in favour of the implementation of MAFR. Key words Mandatory Audit Firm Rotation, MAFR, independence, audit quality, auditor rotation.Item The usefulness of the annual reports for accountability and decision-making purposes by the KwaZulu-Natal municipalities.(2021) Radebe, Nkosinathi Emmanuel.; Razak, Mohamed Hassan Yousuf.; Nomlala, Bomi Cyril.According to the IPSAS and ASB’s Conceptual Frameworks for Financial Reporting, annual reports prepared using these frameworks present information that users can use for accountability and decision-making purposes. Such conceptual frameworks state that the annual reports’ information must exhibit important and enhance qualitative characteristics to be helpful to the users. The study’s purpose was to determine whether the annual reports prepared by the KwaZulu-Natal municipalities presented information that is useful for accountability and decision-making. The setting for this study is all the municipalities in KwaZulu-Natal. However, only 43 annual reports were included in the results of this study. The study analyses annual report contents using a content analysis methodology based on a 21-index research instrument developed by Beest, Braam, and Boelens (2009). The research instrument operationalises the qualitative characteristics of useful information into 21 measurable disclosure indicators. An exploratory factor analysis was used to ascertain the relationships between variables. The study results revealed that the quality of annual reports prepared by municipalities was satisfactory, notwithstanding that there is still room for improvement in the overall usefulness of the annual reports. Most annual reports omitted forward-looking statements and included technical jargon that was not clarified. The majority of municipalities used historical cost accounting for assets rather than fair value cost accounting in their annual reports. Municipalities need to limit technical jargon in the annual reports, and all technical terms should be explained in a glossary. Municipalities should also present forward-looking information that will enable users to make future expectations. The results of this study contradict previous research conducted in Europe and Asia that concluded that annual reports were inadequate for accountability and decision-making. However, the study lacks the interpretive analysis component necessary to provide an accurate qualitative view of annual report by users. Notwithstanding this limitation, the results of this study lay the groundwork for future research on this topic.