“I run a small accounting firm. We have always tried to be as BEE compliant as possible given our economic realities. I understand that a revised BEE charter for the accounting profession has been released for comment which introduces some key changes for our industry. Is this true?”
You are correct in that a revised Draft Chartered Accountancy (CA) Sector Code (“Revised Code”) was issued for public comment late in April 2019. Although the Revised Code aligns extensively with the Generic BEE Codes of Good Practice, the Skills Development Element has received particular attention in the Revised Code.
In the write-up to the Revised Code it is emphasised that a shortage of black chartered accountants exists and that the accountancy profession would need to grow the number of black persons in the CA profession to reflect the country’s demographic representation. To do this, the profession wished to incentivise accountancy firms to invest in skills development and bursaries for black chartered accountants and so help increase the number of black chartered accountants over time.
To enforce this, the Skills Development Element has received an additional 10 points allocation under both the QSE and Generic Scorecard, making the weight of the Skills Development Element substantial compared to the other scorecard elements under the Revised Code. Also considering the fact that the Skills Development Element is a Priority Element, requiring 40% of the available points for the element to be obtained to avoid reducing a BEE level on the scorecard, further emphasizes the weight that the Skills Development Element now carries within the overall planning of any accountant firm’s BEE compliance.
Under the QSE scorecard the Skills Development Element is targeted to move from 25 points to 35 points with a reduction of points under the Enterprise and Supplier Development Element. Under the Generic scorecard the Skills Development Element is to move from 20 points to 30 points again with a concomitant reduction in points under the Enterprise and Supplier Development Element.
What this means is that accounting firms will have to look very carefully at their Skills Development planning to ensure that they invest in the appointment, funding and training of black chartered accountants at their firms, or run a very real risk of being BEE non-compliant or at least having a poor BEE scorecard result.
It will be interesting to see whether the Revised Code is eventually promulgated as it now reads, although all indications are that accounting firms should not delay but commence preparing themselves to meet the requirements of the Revised Code in respect of Skills Development.