The move to review Namibia’s Public Auditors and Accountants Act, making it mandatory for accounting practitioners to register with the Public Accountants and Auditors Board (PAAB), is good news for the country, the profession and the public. It also comes at a time when Africa has been declared a free trade area, making it more important than ever for accountants to belong to professional bodies.
South African Institute for Business Accountants (SAIBA) CEO, Nicolaas van Wyk, says the proposed change to Namibian accounting regulations is an important and necessary move. “There is a close history between South Africa and Namibia and the two countries have similar legislative frameworks, especially concerning their respective Companies Acts.
“To date, only auditors have been regulated in Namibia, which is not sufficient, especially as the auditing process only occurs about three to six months after the entire financial reporting process. This has led to accounting irregularities and instances of malpractice and corruption. The new law will facilitate comprehensive regulation of all accounting professionals,” he added.
SAIBA representative and TS Advisory Namibia forensic accountant, Lehana Nel, explained that the new regulations are expected to counter corruption in the country, such as the Fishrot scandal of 2019, and address the proliferation of fly-by-night accountants – operators in the industry who do not have legitimate qualifications for the work they claim they are able to do.
“There have been instances where individuals with a mere high school accounting qualification have conducted audits and signed CCs. Currently, there is no legal framework for the regulators to address this type of malpractice and it is one of the main reasons the PAAB is revising the Act. Not only will the new regulations make the falsification of information a criminal offence, but it will protect public interest too.”
Notably, accounting professionals in Namibia will now be required to be part of professional bodies such as SAIBA to ensure the same standards and quality of services are provided and that people and businesses are protected in the event of malpractice.
Nel said the benefits of accountants belonging to a body such as SAIBA include support, training and protection. “It benefits Namibian businesses and the economy too as they benefit from standardised and higher quality services.”
SAIBA is the second largest accounting body in Namibia, with about 400 members. Nel works closely with several government departments to keep members up to date, including the Legal Assistance Centre, Business Intellectual Property Authority, Inland Revenue and the Financial Intelligence Centre.
Van Wyk explained SAIBA’s history in Namibia. “SAIBA was awarded accounting officer status in South Africa in 1987, allowing its members to sign off on financial statements for close corporations (CCs). Because Namibia had a similar CC statute to South Africa, SAIBA members were able to obtain legislative recognition in Namibia in 1990.”
This year, SAIBA will run a Continuous Professional Development (CPD) programme in Namibia, which includes support webinars for members regarding changes to legislation, updates on technical standards, and advice on practice management.
Van Wyk said the changes to Namibian law are timely, especially given the commencement of the African Continental Free Trade Area (AfCFTA) agreement, which will create the largest free trade area in the world and connect 1.3 billion people across 55 countries.
The change in Namibian law and the free trade agreement are aligned with SAIBA’s view that services in Africa should be liberalised. “Most African countries have enjoyed independence since the 1950s, so the free trade agreement is long overdue. South Africa alone imports a mere 12% from its neighbouring African counterparts,” noted Van Wyk.
With markets opening up on the continent, he said the profession has a significant role to play in ensuring accounting and reporting integrity on the continent. “CFOs, in particular, can play a major role in making sure Africa has strong representation at the World Bank, the UN or other international financial reporting boards where they need to adopt a position that protects the continent’s economies.
Van Wyk said CFO involvement in corruption on the scale of the Fishrot scandal in Namibia or state capture in South Africa is difficult to understand. “At a listed company level, all the regulatory requirements should be in place, with qualified CFOs and accountants involved.”
This is one of the main reasons SAIBA pioneered the concept of a standardised competency framework for CFOs and established a set of criteria – or competencies – that they need to master before being able to achieve an official SAIBA CFO (SA) designation.
“Importantly, the position of CFOs also needs to be strengthened through statutory means. They need to have an official officer position and their duties (or some of them) need to be described by statute – then when they are pressurised by ministers or municipal managers or CEOs to sign-off on questionable transaction, they are protected by an Act that requires them to report corrupt transactions,” Van Wyk continued.
Van Wyk concluded that as a profession, the accounting function has made great strides in improving its branding and image. “There is, however, still more we can do and this is why bodies such as ours are so important for standardising the accounting value chain and promoting widespread ethical behaviour – in Namibia and throughout Africa.”