Figures released by the South African Institute of Chartered Accountants (Saica) show that the number of finance graduates writing the Initial Test of Competency (ITC) exam – the first of two board exams that need to be passed in order to qualify as a Chartered Accountant (CA) in the country – saw a sharp 24% drop this year.
With 2 946 candidates taking the exam compared to 3 887 in 2021, concerns have been raised about the decline, which comes amidst a “undersupply” in the wake of increased global demand for South African-trained accountants with the acclaimed CA(SA) qualification.
“The reduction in the number of ITC examinees is alarming, especially as it comes in the midst of a boom in global demand for South African-qualified chartered accountants,” says Graeme Marais, director of finance recruitment company Blue Recruiting.
He notes that the number of candidates taking the ITC exam had been on the rise before 2022, growing by 19% in 2020 and 6% in 2021.
“This year’s ITC intake fell by around a quarter, which means the system will be producing fewer chartered accountants in three- or four-years’ time,” warns Marais.
“The fact that the potential number of CAs who will graduate in 2025 in South Africa [will consequently] drop by such a large number is a worry for me and should be for the entire market.”
Robert Zwane, Saica’s executive in learning, development and national imperatives, says there are various factors that can account for the drop.
Reasons for the decline
He notes that one of these factors is related to students needing to adapt to blended learning in university during Covid-19 restrictions over the past two years.
“This, of course, is not limited to students pursuing CA(SA) designation.”
“The global consensus is that students have been negatively affected by the challenges of studying remotely and that these effects will be evident in the outcomes of these challenges on education and training for years to come,” adds Zwane.
According to Professor Nico van der Merwe, outgoing CA programme coordinator at the North-West University, the drop could be due to the Covid-19 pandemic, and poor matric mathematics results.
“We have also seen a steady drop in students qualifying to study CA with the poorer grade 12 mathematics marks the country has seen over some time. Intakes are generally down and this has now spilled over to postgraduate level,” he says.
“In my opinion, the main reason for the drop in numbers was the impact of emergency remote teaching and learning… that was necessitated by the Covid-19 pandemic and government’s related regulations,” van der Merwe, however adds.
He says the universities could not have avoided the drop in CA candidate numbers.
Strong Saica standards
“Saica is maintaining a high standard of qualification and has not dropped the standard of the ITC or changed the competency framework,” notes van der Merwe
“There were simply fewer students that could complete the CA university qualification successfully in an emergency remote teaching and learning environment, despite our best efforts…”
Meanwhile, Marais reiterated his concerns around the brain drain from SA’s accounting and auditing industry.
He warns that the increasing scarcity of CAs locally is being compounded by qualified South African professionals leaving the country to work particularly in the United Kingdom and Netherlands.
“This is not to say that our CAs are necessarily leaving, though… The world, suffering from the great resignation, is now waking up to the fact that our brilliant South African CA’s can fill vacated jobs at a fraction of the price, while they remain in South Africa,” he says
“A large number of CA(SA) professionals are already being employed to work remotely,” he notes.
According to Marais, the decline in the country’s CA intake numbers has the potential to harm the economy.
“Chartered accountants are the lifeblood of the financial sector,” he says.
“A reduction in their numbers could have a serious impact on the sector, and the economy in general. The reality is, however, that this anomaly can be rectified in future years by greater intakes, while maintaining the high CA standards of Saica. The effects of Covid are temporary, but we need to work on our matric results.”
Nondumiso Lehutso is a Moneyweb intern.