The President of the South African ICA has attacked conventionalr being ‘meaningless’. reporting practices by companies in the developed world for failing to produce meaningful performance measures.
Speaking at the Scots ICA conference in Edinburgh last week, Selwyn MacFarlane, who is deputy chairman of South African Breweries, also criticised a lack of integrity among chartered accountants in business involved in masking corporate failure.
MacFarlane explained how his company had gone beyond managing only according to the cashflow statement on the basis that cash ‘is not king but the keystone which by definition is “that on which all else depends”‘.
SAB now incorporates a cash-value added statement in its audited annual financial statements, to bring ‘the whole value-added issue and stakeholder relationships into proper and credible focus’.
‘It is amazing how most businesses in the developed world are still content to announce their annual results and overall performance in terms essentially related to the bottom-line profit as if that small residual element, concerning only one of the stakeholders, is all that matters,’ said MacFarlane.
‘Is the perspective of the business community so badly skewed that however much value has been added to the economy as a whole hardly receives a mention, let alone the significant wealth distributed to the employees and the state?’
Later, MacFarlane reminded the conference of the need to maintain professional integrity, even in the event of corporate failure. ‘While we criticise auditors for not telling us when things are going wrong, we should be criticising chartered accountants in business who have been party to these events.
‘If necessary their accountancy qualification should be taken away from them.’
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