Browsing by Author "Rajaram, Rajendra."

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An analysis of information technology risks and governance disclosure: evidence from the top 40 JSE listed companies.
(2022) Nyagope, Taurayi Stephen.; Rajaram, Rajendra.; Oloyede, Obagbuwa.
The study analysed the extent to which information technology risks and governance is disclosed by top 40 JSE-listed companies in their 2021 integrated reports as part of the risk governance practices. It also conducted a review to identify similarities and differences between King IV and other international standards such as ISO 27002, 38500, COBIT 5, SOX, and ISA 315 on IT governance and risk disclosure requirements. The results revealed that 32 out of the top 40 JSE-listed companies (80%) fully complied with King IV and other international standards on the disclosure of their IT governance and risk management in the integrated and corporate governance reports. The results further revealed that 8 out of the top 40 JSE-listed companies (20%) partially complied with King IV on disclosure of IT governance and risk management. Furthermore, the results indicated that King IV and other international standards were similar on 19 out 24 (79%) of the IT governance and risk management disclosure requirements and differed on 5 out of 24 (21%) requirements. The study confirmed the extent of IT and risk governance disclosure of the selected companies and determined areas of similarities and differences. The study adds to the debate on King IV disclosure requirements with regards to IT governance and risk management by public companies in corporate reporting and further adds to the debate on stakeholder theory.
Capital flow volatility, financial deepening and capital market performance in low-income countries.
(2018) Mamvura, Kuziva.; Sibanda, Mabutho.; Rajaram, Rajendra.
This study sheds light on the sources and impact of foreign capital flow volatility and its directional linkages with financial deepening and capital market performance in low-income Southern African Development Community (SADC) countries. It employs decomposed quarterly data on net foreign capital flows for a period spanning 16 years from 2000 to 2015. Decomposed net capital flows capture the dynamics of both inflows and outflows while taking domestic and foreign investors’ contribution to the dynamics of capital flow volatility into account. The study is unique in that it uses contemporary panel data regression methods to investigate the behavior of capital flow volatility, financial deepening and capital market performance in low-income SADC countries. Firstly, the panel autoregressive distributed lag (P-ARDL) model reveals that both portfolio flow and remittance flow volatility are significantly determined by domestic price level, money supply, real Gross Domestic Product (GDP) and interest rates. Global GDP significantly affects portfolio volatility but has no significant effect on remittance volatility. Only domestic and global interest rates are negatively related to remittance and portfolio volatility in these economies. Secondly, the panel vector error correction model (P-VECM) investigation reveals a bi-directional relationship between remittance flow volatility and financial deepening and also indicates a one-way causal relationship from portfolio flow volatility to financial deepening. Finally, the panel vector auto regression (P-VAR) model finds that global shocks are rapidly transmitted to the domestic economy and not vice versa. Shocks in portfolio volatility account for significant variations in money supply and lead to a decline in general price levels from the short run to the long run. Additionally, changes in remittance volatility impact directly and significantly on domestic interest rates and consumer price levels. Remittance volatility impacts positively on real GDP while portfolio volatility exert negative pressure in SADC countries. In order to achieve stable and constant capital flows, policy makers should adopt programs that lead to financial growth, price and interest rate stability. Given the paucity of macro-financial studies on the region, the study provides meaningful empirical evidence on the behavior and impact of portfolio and remittance flows in low-income SADC countries.
Factors of tax compliance that influence small business growth in KZN.
(2018) Naicker, Yergenthren.; Rajaram, Rajendra.
Small and medium enterprises play an important role for South Africa. They serve as a vehicle in creating jobs for local communities. KwaZulu-Natal (KZN) is the second largest province in the country and the necessity of developing sustainable small and medium businesses cannot be overemphasized. The South African government has identified and made the development of small businesses as one of their strategic objectives. Despite the importance of these businesses for the country and province, there are many challenges that these businesses face. One of the most onerous and time consuming challenges is tax compliance. Tax compliance was defined as the preparation, submission and payment of taxes due within the specified time periods and in order to achieve the objectives set out by government, it is necessary that the tax systems for small businesses be efficient and simplified in order to meet the needs of the sector. The research has been undertaken to determine if tax compliance is a factor which has negatively influenced businesses in KwaZulu-Natal. The literature review suggested that tax compliance is a significant factor for small businesses and the current system of taxation is ineffective. The research design was quantitative in nature. A questionnaire was completed by eighty-five small business owners and these findings were statistically analyzed. The empirical research indicated that small business owners perceive tax as a threat for business growth and sustainability. In addition, these business owners also feel that the current initiatives introduced by the South African Revenue Services (SARS) is not helping to address the problems with compliance and they require more from the government and the SARS. The findings from this study will assist the SARS in understanding the specific challenges that small and medium business face and help to improving the current tax policies for small businesses.
Factors that affect accounting students’ academic success at undergraduate level at Durban University of Technology.
(2022) Thompson, Tanya Felicia.; Rajaram, Rajendra.; Rathnasamy, Shagaran.
Numerous international and national studies have been conducted that have concentrated on factors that influenced and impacted on student success, where the specific focus was on undergraduate student success in academic programmes. A lack of research in this area had been highlighted both nationally and locally, especially with KwaZulu-Natal, and this gap in such literature justified further research in the province. The purpose of this study was to investigate the influence and impact of various factors on students’ undergraduate studies at a university of technology. The student success model that was created for this study was based on Bronferbrenner’s bio-ecological model which recognised multiple systems that influence student success. In this study, these systems are referred to as student success factors, namely the first-year student experience programme, the tutor programme, the student success programme, family support, financial support, and institutional support. The research was positioned in the Positivist Paradigm and consisted of an investigative study. The sample size was a minimum of 30 respondents. The study used a single method approach. The primary data collection tool was a survey questionnaire. The data were collected using an online questionnaire, and this being a quantitative study, the data collected were statistically analysed using both descriptive and correlation methods. The target population consisted of post-graduate students who had completed their three-year undergraduate academic programmes in the field of accounting in the Accounting and Informatics faculty at the Ritson Road campus of the Durban University of Technology. As indicated in the results, a combined 71.9% correlation among the postgraduate students relating to factors in the questionnaire about specific programmes, namely first-year student experience, tutor, and student success that retrospectively, positively impacted and influenced their undergraduate studies. The research also found that students' reactions to various support factors varied. From the results, of the list of key student success factors, namely financial, institutional and family, more than 80 percent agreed that family support contributed to their student success, while more than half of the participants felt that support from the institution was a significant factor in their student success. It can be concluded that all factors investigated in the study, barring the financial factor, positively influenced and impacted these students’ success at undergraduate level. Results emanating from this research study are intended to be helpful to academics lecturing on the undergraduate level. The findings of this research would also assist in the development of programmes or initiatives by institutions of higher learning to enable greater academic success with undergraduate students.
IFRS for SMEs: an emperical study of the KwaZulu-Natal SME sector.
(2018) Essa, Shazia.; Rajaram, Rajendra.
The Companies Act of South Africa requires companies to comply with either full IFRS or IFRS for SMEs. International Financial Reporting Standards (IFRS) provide a single set of accounting principles and guidelines that different countries can apply to promote comparability and understanding of financial statements. In 2009, the IASB introduced IFRS for SMEs. The objective of the IASB was to provide the SME sector with an accounting framework that was more cost effective and less complex than full IFRS. SMEs play a fundamental role in the global economy. Hence, it becomes imperative that focus is directed at developing and sustaining SMEs. International studies have been conducted to determine the effectiveness and perception of IFRS for SMEs in other countries. In South Africa studies were conducted in the early stages of implementation. This warrants further research on the perceptions of IFRS for SMEs in the SME sector subsequent to the implementation of IFRS for SMEs in South Africa. This study was undertaken with the objective of establishing whether or not the IASB’s goals of IFRS for SMEs being less complex and more cost effective are met. The study also focused on whether the SME sector has the relevant financial reporting skills to apply IFRS for SMEs. A survey was conducted with experts in the field of IFRS for SMEs. This constituted 15 academics and 15 accountants/auditors. The survey was issued to 30 respondents and the response rate was 100%. The study established that while IFRS for SMEs meets the financial reporting requirements of internal and external users, there are still some challenges that exist. IFRS for SMEs is considered difficult to understand by SME owners/management and is therefore difficult to apply by them. Hence, there is still a need for the SME sector to outsource their financial reporting requirements to independent accountants, which may prove to be costly. Improving the financial reporting skills of the SME sector may assist in reducing the outsourced accounting costs. More practical hands on training may prove to be more beneficial than the online training that is currently available for the SME sector. The knowledge generated from this research will benefit the SME sector, as well as assist Government and Accounting Regulatory Bodies to provide the necessary IFRS for SMEs support to the SME sector.
Impact of integrated reporting on financial performance.
(2019) Mukeredzi, Takunda Chipochangu Grace.; Rajaram, Rajendra.; Rathnasamy, Shagaran.
Companies the world over have implemented the new phenomenon of Integrated Reporting. This followed global initiatives introduced by the International Integrated Reporting Council (IIRC), and in South Africa by the Integrated Reporting Council of South Africa (IRCSA). In South Africa, it is mandatory for all listed companies on the Johannesburg Stock Exchange to produce and publish annual Integrated Reports. This also aligns with the recommendations of the King IV Code of Corporate Governance. The major weakness of Integrated Reporting is that it is an expensive and time-consuming process, given that numerous resources go into its development and one report can exceed a hundred pages. However, its strength rests in the provision of a wholistic view of the company to its stakeholders. In view of stakeholder requirements and benefits, the question that remains unanswered relates to whether there are financial benefits for companies that employ Integrated Reporting. Such an understanding is crucial as such information may inform companies considering its adoption. This study sought to determine whether Integrated Reporting had any impact on the financial performance of companies in South Africa generally, and, in particular the Top 40 Johannesburg Stock Exchange listed companies. This study on Integrated Reporting was underpinned by the stakeholder theory. Company stakeholders are the primary audience of the Integrated Report. By adopting Integrated Reporting, a company becomes more mindful of its stakeholders as they influence the decision-making processes. Given the focus of the study on Integrated Reporting, the theory enables establishing whether or not Integrated Reporting reflects, offers and delivers all the financial and non-financial information required to stakeholders. The study was located within a positivist paradigm, given that there was a distance between the researcher and the researched. The study commenced with hypotheses and employed statistical measurements for data analysis and presentation. Using a quantitative approach, data were drawn from the Johannesburg Stock Exchange. In selecting the Top 40 listed companies based on market capitalization, the study employed statistical analysis to investigate the impact of Integrated Reporting on financial performance. On the over all, this study found that companies did not benefit significantly from Integrated Reporting. The study found that Integrated Reporting has no impact on financial performance as there was no relationship between return on assets (ROA) and Economic Social Governance (ESG) score. It also emerged that there was no impact on financial performance as there was no relationship between Economic Value Added (EVA), Tobin Q and ESG. This suggests that companies may not be utilizing fully the synergies that come with the adoption of this reporting phenomenon. It may also be that Integrated Reporting is not assisting companies in generating any long-term value.
Land reform programmes contribution into agricultural economic development : KwaZulu-Natal land reform projects.
(2016) Mnikathi, Sandile Jason.; Rajaram, Rajendra.
This study examines the contribution of South Africa’s land reform programme to agricultural development and economic growth with a focus on land reform projects in KwaZulu-Natal province. The objective of the study was to understand the extent to which the restitution, redistribution and land tenure programmes are achieving the country’s land reform objectives. Key objectives of the democratic South African government’s land reform programme since 1994 have been to redress the unjust racially skewed patterns of land ownership in the country, and to boost the rural economy. Significant quantities of land have been returned or transferred to previously disadvantaged communities, and the majority of the redistributed land involves agricultural land use as the government has aimed to transfer 30 % of commercial agricultural land to emerging farmers. This study focuses on these agricultural land reform projects and assesses the contribution of the land reform policy to the agricultural production and operation of these projects. The study adopted a qualitative, case study research design. The target population for the study included representatives from the Department of Rural Development and Land Reform, the KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs, the KwaZulu-Natal Agribusiness Development Agency, and selected land reform projects. Face-to-face, semi-structured interviews were conducted with these representatives to gather information on the land reform programme’s contribution to agricultural development and economic growth in KwaZulu-Natal. A review of literature on post-settlement issues in land reform was used as a source of secondary information. The study finds that a lack of post-settlement support from government remains the greatest challenge to the successful implementation of the land reform policy in South Africa. Agricultural development through land reform has been achieved largely due to support from the private sector in the form of technical assistance, skills training, maintenance and agribusiness training. With such support, large numbers of projects have managed to acquire the equipment necessary for sustained agricultural production. The study therefore concludes that whilst South Africa’s land reform programme has succeeded in transferring land ownership, this land cannot be used effectively to generate agricultural outputs without adequate funding and support. In order to achieve agrarian reform, land reform projects need to receive the appropriate post-settlement support from both government and the private sector. Lastly, recommendations for the current land reform policy are presented as well as possible avenues for future research.
A needs analysis of financial management and accounting skills in the SME sector in KwaZulu-Natal.
(2010) Rajaram, Rajendra.; O'Neill, Richard Charles.
The Theory of the Firm consists of a number of economic theories that attempt to describe the nature and the behaviour of the firm. One of the important assumptions of the theory is that of profit maximisation. In order to maximise profits, there are four factors of production that are required by the firm, i.e. land, labour, capital and entrepreneurship. Although capital may relate to the acquisition of funds that are required by the business, it also relates to proper financial skills that are needed to manage these funds. Therefore, in order to successfully establish and manage a business, especially a small or medium sized enterprise, it is necessary to possess financial management and accounting skills. The SME sector has been identified as having the potential to contribute to economic growth of the country. In order to achieve this objective, is important that the sector is well managed and that there are sufficient accounting and financial management skills in the sector. The research has been undertaken in order to determine and evaluate accounting and financial management skills that are needed by the SME sector in KwaZulu-Natal. The literature review suggested that an absence of accounting and financial management and accounting skills contributes to the poor performance of the sector in South Africa and that the possession of some basic skills in these fields may enhance the growth and profitability of the sector. The research design was of a quantitative nature. A questionnaire was completed by a group of thirty industry experts and these findings were statistically analysed. The questionnaire allowed for further comments and opinions from the experts on selected accounting and financial management aspects in the SME sector. The empirical research indicated that: • there is a low level of accounting and financial management skills in the SME sector in KwaZulu-Natal; and, • there is a need to improve the accounting and financial management skills in the SME sector in KwaZulu-Natal.
Success factors for business rescue in South Africa
(2016) Rajaram, Rajendra.; Singh, Anesh Maniraj.
In 2011 a new Companies Act, No. 71 of 2008 (RSA, 2008), was implemented in South Africa. A feature of this Act was the introduction of business rescue legislation. Although this legislation was implemented in May 2011, statistics indicate that the success rate for business rescues is approximately 12%. The low success rate prompted debate relating to the effectiveness, and continued suitability, of business rescue as a mechanism to rehabilitate financially distressed companies. A feature of the business rescue environment in South Africa is the lack of knowledge, necessitating more research in the field. This study was undertaken with the initial objective of diagnosing and ranking reasons for failed business rescues in South Africa. Thereafter, the study focused on improving the success rate by establishing and ranking a set of factors that will improve the chances of a successful rescue. Due to the importance of the business rescue practitioner in the overall success of a rescue, the research also focused on competencies required to be a successful practitioner. A mixed methods research approach was utilised to address the problem of the low success rate. A survey was conducted with the membership of the Turnaround Management Association of Southern Africa. The survey was mailed to 130 members and the response rate was 54%. The survey was complemented by undertaking an interview with seven of the top ten business rescue practitioners, according to the number of practitioner appointments. The original contribution to knowledge of this study is the ranking of a lack of post rescue funding which has the highest impact on a failed business rescue; the ranking of an accreditation framework for practitioners as the most important factor that will result in a successful business rescue; and the fact that an accounting qualification and effective cash management skills must be possessed by a successful practitioner. The study recommends the establishment of an independent self-regulator to implement the identified success factors for an improved success rate. The knowledge generated from this research will benefit business rescue practitioners, the financial sector, stakeholders of companies intending to go into business rescue and the Companies and Intellectual Properties Commission.
Value relevance of financial statements of non-financial firms listed on the Johannesburg Stock Exchange.
(2020) Sixpence, Atanas.; Adeyeye, Olufemi Patrick.; Rajaram, Rajendra.
The year 2010 marks a full calendar year after the 2007-2009 global financial crisis (GFC). The GFC was characterised by huge losses across all equity indices on the Johannesburg Stock Exchange (JSE). The losses were not entirely commensurate with the operating performance of listed companies, as reported in their financial statements. While general negative sentiment associated with the GFC was a major driver of the mismatch between firm performance and share price movements on the JSE during the GFC, continued mismatches witnessed in the post-crisis period (2010-2017) raise questions regarding the usefulness of financial statements in explaining share price movements. This research examines value relevance of tangible book value, EBIT from continuing operations, firm size, financial risk, cash dividends, and retained earnings, using a dynamic panel dataset. The population comprises of all non-financial firms listed on the JSE that were active for the entire 2010 to 2017 study period, excluding new listings and de-listings during the period. Purposive sampling from all eligible industry sectors of the JSE was used, where the number selected from each industry was based on the total number of eligible firms in that industry, the population size and the sample size. Based on a population size of 200 firms, 50 were sampled for this research. Value relevance was determined by statistical significance of each financial statement variable, where lack of statistical significance means a variable is not value relevant. Two-step System Generalised Method of Moments (System GMM) was used in this study’s regressions. The dependent variables are firm value and share prices, where firm value is measured by market capitalisation, enterprise value and Tobin’s Q. EBIT was found to be value relevant regardless of the measure of firm value used while, on the other hand, book value is not value relevant. Firm size was found to have no significant effect on share price movements. Influence of a small firm’s discount on share prices of small companies is one of the original contributions of this study. Total debt and debt/equity ratio are the two measures of financial risk used and the debt ratio was found to be value relevant regardless of a firm’s risk category. Value relevance of total debt is contingent upon a firm’s risk category, leading to a high debt illusion, which is another original contribution of this study. Cash dividends and retained earnings were found to have no impact on firm value, which was measured by market capitalisation and Tobin’s Q. Findings in this study inform the decisions of company executives, equity investors, investment analysts, accounting standards setters, and other policy makers.