CAPE expectations.
| Author | Luther, Robert |
A CIMA-backed survey shows clearly that the huge changes in Southern African society are affecting management accountancy in the region. Robert Luther, Diane Bowler and Steve Longdon explore how the profession has responded and ask where it goes from here
Southern Africa must be one of the most appropriate regions for research into whether management accounting practices remain independent of changes in a country's economic situation. Both South Africa and Zimbabwe have undergone fundamental political and structural changes over the past decade. They have long-established links with the UK, their markets have been penetrated by international corporations and their companies are beginning to compete in global markets.
This study investigated whether management accounting techniques in Southern Africa have been affected by changes in the business environment and whether some techniques were perceived to be more or less useful in this region than in the UK.
When Granlund and Lukka[1] conducted research in Finland, they found that internationalisation and competition led to more outward-focused management accounting. In Southern Africa; we expected increased competition, reduced regulation and greater interest rate volatility (together with global changes in business practice and information technology) to have promoted strategic, real-time management accounting at the expense of traditional, "historic" management and financial accounting.
In 1991 The Certified Accountant stated "the changing political climate in South Africa will provide new opportunities for the ACCA", so this study also considered whether the structure of the accountancy profession had been affected by affirmative action and changes in managerial practices and IT.
The research involved both field studies and a questionnaire. Companies chosen for field study work reflected the key industries of Southern Africa -- mining, financial services, food processing, travel and tourism. We chose 25 companies to take part in the research, and questionnaires sent to accountants in Southern Africa and the UK elicited 216 responses.
The field study found that Zimbabwean companies generally used standard techniques for budgetary control and variance analysis, but they all emphasised the importance of cash flow forecasts and control over working capital. This is not surprising given that the annual interest rate at the time was over 50 per cent.
This situation was mirrored in South Africa, although newer techniques were being...
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