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IES 3 Professional Skills, issued by the International Federation of Accountants in 2003, lists five essential skills that professional accountants need to acquire: intellectual, technical and functional, personal, interpersonal and communication, and organisational and business management skills. In education programmes, accounting students may be required to work in teams and may therefore acquire some of these skills through the team experience. IES 8, Competence requirements for audit professionals, includes “working in teams effectively” and “presenting, discussing, and defending views effectively through formal, informal, written, and spoken communication” as part of the skills requirement which should be included in the education and development programme for audit professionals. Working in teams, or cooperative learning, is a teaching technique used in the formal education phase, which enables students to acquire some of these skills. The paper uses the results of a questionnaire survey to investigate how teams function in an accounting project. Although the results indicate that skills such as meeting management and interpersonal skills have a positive effect on the students’ satisfaction with the team, no link could be found to the students’ project mark. These results suggest that skills such as meeting management and interpersonal skills, if included in the formal education phase, may contribute positively to students’ career preparedness. The study also found that students did not consider peer assessment appropriate.

The value added statement has been voluntarily reported by South African companies for many years despite reservations about its usefulness. This article examines current literature on value added statements in two areas: the usefulness of the value added statement in South Africa and the relevance of social accounting theories in explaining its continued disclosure in South African listed companies’ annual reports. It also reports the results of a questionnaire survey addressed to preparers of value added statements.The research studies examined in the literature review indicate that legitimacy theory is more likely to provide an explanation for the disclosure of value added statements in annual reports in South Africa. The results of the empirical survey indicate that the majority of the respondents are of the opinion that it is desirable to prepare a value added statement, but that it is not used in the majority of companies. Furthermore, the reasons advanced by the preparers for the desirability of the value added statement provide some evidence that legitimacy theory may be behind the propensity of companies to publish a value added statement. The article recommends that the preparation of the value added statement should be standardised. However, the disclosure of an independently prepared value added report may be more useful to all users.

This study looks at an annual report project that simulates a real‐life situation to encourage students to integrate knowledge, develop skills and values appropriate to self‐directed enquiry and research, use technology, work in groups and be active participants in the learning process, question, seek answers and learn independently. Students selected the annual report of a Top 150 JSE‐listed company and answered questions on aspects of financial and managerial accounting, auditing and finance. A questionnaire investigated whether project participation enhances skills (such as judgment, interpretative, listening and problem‐solving skills) and abilities (such as thinking critically, asking pertinent questions, organising). There were significant differences in students’ perceptions, including gender and language differences. The results show accounting educators using such projects which skills and knowledge areas need to be addressed elsewhere in the curriculum and whether to include such a project in their programmes.

Differential reporting was introduced in South Africa with the enactment of the Corporate Laws Amendment Act 24 2006. Since it was urgent that the standard‐setters provide limited interest companies with interim guidance as to the preparation and presentation of financial statements, South Africa adopted the International Accounting Standards Board’s International Financial Reporting Standard for Small and Mediumsized Entities in its draft form. This study looks at the development of accounting standards for small and mediumsized entities in South Africa. It also examines analyses of prior research on differential reporting and the due process of the International Accounting Standards Board on this topic, as well as the due process of the South African standard‐setter. The paper provides a contextual analysis of the unique reporting environment of South African companies and concludes that adopting the draft IFRS for SMEs may have been the best option for the standard‐setting body in providing relief for limited interest companies from the cost of complying with the International Financial Reporting Standards while still enabling auditors to express an opinion on the financial statements.

Recent accounting literature (PAAB 2001; SAICA 2000) indicates an increasing emphasis on the need for individuals, studying chartered accountancy, to acquire appropriate professional skills such as personal, interpersonal, communication and intellectual skills. The University of Natal uses an annual report project in the third year of the Financial Accounting course to develop these skills in its students. This questionnaire‐based study reports on students’ perceptions of the project and indicates what changes have been made for future projects. The findings of the study are useful for accounting lecturers as it highlights some of the issues that are involved in the use of an annual report as part of an Accounting course.

The aim of this study was to investigate whether the performance of a company’s intellectual capital can explain organisational performance. The dimensions of a company’s performance are (1) profitability, (2) productivity and (3) market valuation. Data were obtained from a sample of 65 companies that are listed on the JSE Securities Exchange (high knowledge‐base sectors). Findings from the empirical analysis indicate that the relationships between the performance of a company’s intellectual capital and (1) profitability, (2) productivity and (3) market valuation are informative but varied. The empirical findings suggest that the performance of a company’s intellectual capital can explain profitability and productivity, but not market valuation.

Earnings per share (EPS) is a key ratio which must be disclosed in the financial statements of South African listed enterprises. It is used to compare the performance of an enterprise over time and to compare its performance with that of other enterprises. Financial analysts also use EPS to calculate the price‐earnings (PE) ratio. In South Africa, listed companies are required to disclose three EPS measures, namely basic EPS (BEPS), diluted EPS (DEPS) and headline EPS (HEPS). This article reports on the results of a study of financial managers’ perceptions of the importance of HEPS and the actual disclosure practices relating to HEPS in selected listed companies’ annual reports. This article also reports on financial managers’ perceptions of selected other accounting measures of performance (such as EPS) and other financial indicators not ordinarily found in the annual report (such as the PE ratio), of the importance of EPS measures in general and of headline EPS in particular. The study found support for HEPS, compared to other per share measures, despite misconceptions regarding the objective of HEPS. The study also found that 95% of the selected companies disclosed HEPS together with the required reconciliation. However, half of the companies contravened the headline earnings definition. As a result, approximately one third of all selected companies overstated their HEPS.

Differential corporate reporting exists in one form or another in many countries and it is currently on the agenda of the International Accounting Standards Board’s (IASB’s). This article provides some background on this practice and, in particular, on the current position of the IASB and the accounting profession in South Africa with regard to differential corporate reporting. The article also reports on the results of a postal survey of South African Registered Accountants’ and Auditors’ views on the form that differential corporate reporting should take. It was found that there is some support for limited deviations from Generally Accepted Accounting Practice (GAAP), in agreement with DP 163 – Limited Purpose Financial Statements issued by the South African Institute of Chartered Accountants (SAICA).

Investigations into professional accountancy education gathered impetus with the publication of The impact of globalisation on accountancy education by Karreman in 2002. This publication provided a comparative analysis of professional accountancy education in 25 countries worldwide, using a model developed for the classification of accountancy education systems. The rationale behind such an exercise is to promote educational exchange and facilitate educational development. The Karreman study only covered two countries in Africa, namely South Africa and Kenya. This study expands the Karreman study by comparing and benchmarking the professional accountancy education programmes in six member countries of the Eastern, Central and Southern African Federation of Accountants (ECSAFA) using the Karreman methodology. This study reports the results of a questionnaire survey to which seven accountancy bodies located in six countries responded. The results of this study revealed mostly agreement with the Karreman model. All the countries could be categorised as developing countries with common law/Roman‐Dutch legal systems and with a strong British influence. Thus similarities in regulation, education and practical experience are expected. The professional bodies tend towards professional selfregulation with low to medium membership regulation. All countries require practical experience before qualifying, and a theoretical approach to the final examination predominates. The study also shows that there is co‐operation in the region.

This article investigates the sources of financial information used for decisions regarding the buying, holding and selling of ordinary shares. The results of this questionnaire‐based study indicate that the main source of information used by those who prepare annual reports is stockbroker advice, whereas users of such reports prefer communication with management. Preparers of annual reports support the notion that annual reports are a useful source of information, but users prefer the preliminary announcement. Preparers read the income statement more thoroughly, while users read the cash flow statement more thoroughly. The article also provides information on the qualitative criteria used for assessing the usefulness of accounting practices, and some comments on the importance of setting standards and the objectives of the South African Statements of Generally Accepted Accounting Practice.