Pieter Willem Buys

An Investigation of the Economic Performance of Sustainability Reporting Companies Versus Non-reporting Companies: A South African Perspective

Abstract This study explores the potential differences in the economic performances of companies that report on their sustainability information and those companies that do not report thereon. Even though there have been similar studies conducted in 1st world countries, this is the first study of its kind in a developing economy, and considers the economic performances of South African publicly listed companies. Annual performance data, from 2002 to 2009, for the two groups of companies was taken from the McGregor BFA database. The significance of the average differences between key financial indicators of the test-group and the control-group was determined by the t-test, while the difference of positive or negative Economic Value Added and Market Value Added values between these two groups was also evaluated. Even though some evidence indicates that companies that disclose sustainability reports may experience better economical performance, the statistical analysis could not confirm a definite positive relationship between sustainability reporting and economic performance.

The impact of XBRL on the financial reporting supply chain: a South African case study

In recent times there have been major developments in the areas of digitising business information, which can impact the financial reporting supply chain. Such developments include the eXtensible Business Reporting Language (XBRL) technology. The South African regulator of financial services and a major South African retirement fund administrator were recently the first South African organisations to embark on an XBRL proof of concept initiative as part of an attempt to enhance their financial reporting supply chain, from initial data recording, to the submission of the reports, to the analysis of the data. This paper provides highlights of this initiative against the background of current XBRL developments, the financial reporting supply chain and the digitising efforts of such supply chains.

Cultural considerations and the implementation of IFRS: a focus on small and medium entities

Abstract Research revealed that inconsistent accounting practices are often attributable to environmental factors of which cultural differences appear to be the most significant. Prior research considered cultural dimensions in classifying and evaluating cultural differences, which has also been extended into accounting values. This enabled researchers to consider and identify relevant accounting values pertaining to specific accounting scenarios and environments. Recent research considered accounting values pertaining to the adoption of International Financial Reporting Standards. The purpose of the study is to identify the relevant accounting values when a global set of accounting standards is implemented by the SME sector. Based on a sample consisting of final-year accounting students from two different universities in South Africa and one in the UK, our results suggest that contrasting accounting values are considered necessary when adopting a global set of accounting standards by the SME sector. JEL classification: K2 - Regulation and Business Law (Other); L25 - Firm Performance: Size, Diversification, and Scope; M41 - Accounting.

Estimating technical and scale efficiency of red meat production: a South African case study

Abstract The purpose of the study is to use data from a case study to build a data envelopment analysis (DEA) model to compare the financial performances of South African boer goat with cattle and sheep production, respectively. Data was collected by calculating the financial performance, which is broken up into six measurements. These measurements formed the output variables and various levels of capital employed were used as the input variable to determine the technical and scale efficiencies of the comparative red meat product lines. Data was developed for 65 different scenarios, resulting in a total of 455 data points. The study firstly concludes that South African boer goat production outperforms cattle and sheep production financially, and secondly, that it is easier for sheep production to operate at a scale that maximises productivity, followed by South African boer goat and then cattle production.

The accountancy implications of commodity derivatives: a South African agricultural sector case study

ABSTRACT Agricultural companies and commodity processors trade commodity derivatives on the SAFEX Commodity Derivatives market to hedge themselves and their producers against commodity price risk. Agricultural companies have to adhere to International Financial Reporting Standards (IFRS) of which International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, forms part. The objective of the study was to establish a standard methodology for the interpretation of IAS 39 to serve as a benchmark and best practice for South African agricultural companies and commodity processors. The research found that there is no consistent interpretation or application of IAS 39 by the respondents. The recommended standard methodology to follow includes that agricultural companies holding grain inventory for trading should fair value such inventory and that the classification of transactions as derivative contracts, as defined per IAS 39, depends on whether hedge accounting is applied or not.