International demand for South African talent and a low pass rate are impacting the availability of chartered accountants (CAs) in the local economy.
According to financial recruitment consultancy Blue Recruiting, there is a spike in qualified young chartered accountants leaving for the UK, Ireland, the Netherlands, Middle East and tax haven islands.
Graeme Marais, director of Blue Recruiting, says qualified CAs are not only looking for better earnings, they are also drawn by greater job security as well as political and social stability. “Working overseas leads to alternative passports and greater future security,” he says.
He adds that while the UK has always hired South Africans, it is hiring more now than ever.
The Netherlands has also substantially ramped up its hiring of South Africans, making it particularly attractive for workers under 30 by introducing tax reimbursement incentives.
Another factor contributing to the growing shortage in the availability of CAs is the fact that many have been outsourced to large international, typically American, companies and are now working from home.
Willi Coates, brand executive at the South African Institute of Chartered Accountants (Saica), says the number of members moving abroad was “slightly higher” percentage-wise than the overall membership growth in 2021.
However, he says the outflow was bigger in the previous year when CA membership grew by 1 190 members, and the number of members leaving the country grew by 8% or 716 compared to 322 this year.
Change in landscape
According to Nicolaas van Wyk, CEO of the South African Institute of Business Accountants, the dramatic change in the South African business landscape requires a reassessment of business models, revenue streams and efficiencies for local companies.
“South Africa’s economy has been sluggish for many years. The pandemic, power outages, and state capture have all combined to place serious strain on public services and private enterprise.”
He says the accounting profession can help address this new reality by reconsidering what it means to qualify and become an accountant, and how the country retains the top talent it needs to help stabilise and grow the economy.
Van Wyk says in Europe and the US “traditional accountants” make up less than 40% of all chief financial officer positions. This number has been steadily in decline since early 2000.
Businesses seek business-focused accountants, financial managers and chief financial officers – with accounting specialisation outsourced to International Financial Reporting Standards (IFRS) specialist consultants and audit firms.
“South African universities, empowerment charters, large employers, large audit firms, and employment agencies should become familiar with the wealth of highly skilled and qualified accountants that are underemployed and underutilised within the South African economy,” Van Wyk remarks.
“Focusing on old style accounting degrees and qualifications will prevent our economy [from accessing] alternative talent pools and prolong our recovery efforts.”
Low pass rate
Marais refers to the low pass rate of candidates writing the second part of the Saica qualifying examination.
The Assessment of Professional Competence (APC) is a competency-based assessment that reviews the candidate’s ability to demonstrate ethical, personal and professional attributes to real-life tasks expected of entry level CAs.
Marais says the pass rate of 43% can be attributed to the impact of the Covid-19 pandemic with its disruptions and candidates not having face-to-face audit experience since they have been working from home.
Marais says despite the fact that more and more candidates write the exam every year, the number who are successful remains constant.
“Sadly, with the huge technological disruptions during this year’s APC exams, we potentially may see another year of poor results,” says Marais.
Saica CEO Freeman Nomvalo said in a statement following the chaotic December exam that the institute deeply regretted the “myriad of technical challenges” the candidates faced.
The challenges included issues with leased hardware and ancillary equipment as well as internet connectivity problems at examination venues, which compromised the APC electronic writing software.
There are several reports that the entire experience took 15 hours for some of the candidates.
Saica has launched an investigation into the problems and said it would take all the circumstances around the exam into account when assessing candidates’ competencies.