| The Old Man in the Rondavel |
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I was asked to participate in a panel discussion at SAIGA’s 2nd annual conference. The panel was asked how accounting, reporting and auditing makes a difference to the life of an old man living in a rondavel in rural South Africa. What a fantastic question!
Accounting, reporting and auditing provide relevant, reliable information to Parliament, Legislatures and Municipal Councils to hold government organisations, and their elected officials and employees, accountable. High quality financial statements, performance reports, and annual reports, accompanied by independent audit reports – are key to accountability. Members of Parliament, Legislatures and Municipal Councils are elected to represent citizens’ and others’ interest, especially the old man in the rondavel.
While the elected representatives of Parliament, Legislatures and Municipal Councils ‘do their job’ on behalf of citizens, it is increasingly important for citizens to have access to information to improve their lives, actively participate in their communities, and have relevant information when they exercise their right to vote.
One of the statements often made is that the financial statements (and related reports) are too complicated for the ‘average’ citizen to understand. If you read most financial statements, one of the first observations is the accounting and finance jargon used. This, combined with generic wording and the use of templates, makes the financial statements hard to understand and engage with. We often see the financial statements replicating word for word what the Standards require, instead of saying how they were applied by the entity. The ability to change the financial statements and make the information more accessible is in the hands of every preparer and auditor.
We need to move away from viewing the preparation of the financial statements as a compliance exercise and think about what purpose financial statements serve. While it is true that the financial statements serve multiple users, simpler, more precise, entity specific information will be helpful to all users.
Financial statement preparation and auditing should start long before the legislated reporting and auditing deadlines. A key part of this preparation going forward should include how financial statements can provide more useful information and be used by more users. Being part of the change towards improved citizen engagement means applying professional judgement and being bold – as both preparers and auditors. If ever there was a purpose to drive reporting and auditing, let it be the Old Man in the Rondawel.
For more information about the discussions at the SAIGA conference, follow this link |
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