1
NEWSNEWSLETTER OF THE BOTSWANA INSTITUTE OF CHARTERED ACOUNTANTS VOLUME 1 ISSUE 2 DECEMBER 2011
The Driving Forces
Behind the
BICA Qualification:
Botswana’s Own ProfessionalAccountancy Qualification
Botswana i n s t i t u t e
of chartered accountants ,
m i n i s t r y of finance &
development planning, the world bank, the
institute of chartered accountants in england & wales
and the tertiary education council
NEEWSLETTER OF THE BOTSWANA INSTITUTE OF CHARTERED ACOUNTANTS ISSUE 2 DECEMBER 2011 VOLUME 1 ISSUE
2
1
CONTENTSMission Statement
The BICA is universally recognized as the leading profes-
sional body in Botswana
especially known for:
* Inspiring business confidence and investment.
* Leading the profession in the private sector and
in government
* Delivering accounting and auditing best practice
* Providing a professional qualification recognized
internationally
Core Purpose Statement
To promote public confidence in the Accounting Pro-
fession and enhance Compliance with the International
Standards.
Core Values
In order to motivate the right behavior and culture that
will support the implementation of the vision and mis-
sion statement above, the following Core Values were
adopted:
· Integrity
· Excellence
· Ethics
· Independence
· Accountability
BICA Address
Plot 50374, Block 3, 2nd & 3rd FloorFairgrounds Financial CentrePrivate Bag 0021, Gaborone, BotswanaTel: (0267) 3972992, Fax: (0267) 3972982Website: www.bica.org.bwE-mail: [email protected]
2011 BICA NEWS is published on behalf of the Botswana Institute of Chartered Accountants. No part of this work may be used in any form or by any means graphically, electronically, mechanically including photocop-ying, recording, taping, information storage or retrieval system – without permission from the institute except in accordance with the accountants act or laws of Botswana.
EditorsDuncan MajindaVijay Kalyanaraman
Editorial SupportOupa GaofiseRegina RamantebaAjay BhatnagarFeliaty Ndeke
Project ManagerRaymond Dube
Design & LayoutRaymond Dube
Sales & MarketingOupa Gaofise
PublisherPrint City
Printed byPrint City
Editorial Team
2. MESSAGE FROM THE PRESIDENT
4. THE EVOLUTION OF SMPs
8. FRAUD FOCUS: IDENTITY THEFT
10. SHORT STORY CORNER
11. INTERNATIONAL PUBLIC SECTOR
ACCOUNTING STANDARDS (IPSAS)
15. THE BICA QUALIFICATION
20. LEAKY BUCKET PART 6 HOW
MANAGEMENT POLICIES IMPACT
ON CASH FLOWS?
24. THE BICA QUALIFICATION TEAM
22. TAX PLANNING, TAX AVOIDANCE
AND TAX EVASION
28. LEAD THROUGH SERVICE
EXCELLENCE
PresidentMessage from the
Season’s Greetings to all mem-
bers and stakeholders. This
Newsletter comes at a time
when we all look back proudly at the year
gone past to recollect our achievements,
note areas for improvements and take our
resolutions and action plans going forward.
BICA has been on a roller coaster ride
over the last couple of months since the en-
actment of the Accountants Act 2010 and
the official launch of BICA in April 2011. The
BICA qualification took off as scheduled in
July 2011 with 60 registered students and
tuition provided by Botswana Accountancy
College and Botho College. It is my plea-
sure to inform you that our first results were
very encouraging, with 98% and 80% pass
rates registered for Principles of Taxation
and Law, respectively. I wish the students
the best in the coming examinations and
in their journey towards becoming the first
batch of students to attain the prestigious
Chartered Accountant qualification.
In the July 2011 newsletter, I updated
you on the latest developments in terms of
enactment of the Accountants Act 2010 and
Financial Reporting Act 2010. The Coun-
cil had to get into the grove right away in
terms of setting up the new Institute in line
with the requirements of the Accountants
Act 2010 and the Rules as approved by our
members at the AGM. We managed to get
the transition of members done smoothly
and the response from our members was
extremely good. Most of the members man-
aged to get the benefit of the transition,
even though some missed the opportunity.
Now that the transition is over, the next
ACAs will come on board in July 2014, our
first Botswana CAs.
In addition, several firms providing
professional accountancy services regis-
tered with BICA as member firms and the
list grows every month. I urge all firms pro-
viding professional accounting services to
register as member firms with BICA. It is ille-
gal to provide professional accounting ser-
3
I am not just a suit. At Grant Thornton, we don’t
hire suits.
We look for people who want to make a difference and not just being a number.
Authorised training employer of BICA
Contact us:E: [email protected] W: www.gt.co.bw
©2011 All rights reserved. Grant Thornton Botswana is a member firm within Grant Thornton International Ltd (Grant Thornton International). Grant
Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by the member firms
vices in Botswana without being registered
as member firm with BICA, and the penalties
are heavy.
Our twinning arrangement through
the World Bank with ICAEW ended in Sep-
tember 2011 and BICA is working towards
the extension of the twinning project so that
we continue to get the excellent support
from ICAEW. The BICA strategy is on the four
key pillars, namely Governance & Capacity,
Technical Standards – codes and procedures,
BICA Professional Qualification and CPD Pro-
gramme.
BICA has now over 1,200 members
between various categories and we are fast
growing to cross 2,000 members in 2012.
This growth and public expectations require
strong infrastructure to ensure continued
growth of the Institute. The Council re-
cently approved a human resource plan for
the Institute for a 2 year period 2011/12 and
2012/13. Recruitments are ongoing to fill the
respective positions.
The BICA team, through my experi-
enced Council members, and under the in-
spired leadership of CEO Mr. Duncan Majin-
da, along with support from the ICAEW, has
come a long way in addressing the capacity
constraints.
CPD continues to be a key focus area
for the Institute. CPD circulars have been
sent to all members. I urge members to
take these seriously and comply with the
requirements and submit their returns on
time.
BICA is committed to the growth of
the profession and acting as an enabling
link to increase business confidence in our
great profession. The BICA Council has em-
barked on an aggressive branding strategy
to reach across Botswana and has partnered
with Horizon Ogilvy as branding partners to
promote and spread the mission and vision
of BICA.
When we travel across Africa to at-
tend various events and conferences, it is a
great reassurance to observe that Botswana
is used as a role model and benchmark for
many positive aspects and it reflects well on
the hard work put over the years under the
leadership of our past Presidents and our
stakeholders.
BICA Council has been strengthened
further with the representatives from the
Government of Botswana and I take this op-
purtunity to welcome the representatives
into the Council.
Let me take this oppurtunity to thank
our tuition providers, Authorised training em-
ployers, examiners, moderators, ICAEW team,
BICA Secretariat and all our stakeholders for
enabling the take off. We will soar even high-
er with your continued support. Most impor-
tantly, I salute the Government of Botswana
and the World Bank for providing such great
support to the profession and the continued
support to address our ambitions and plans.
On behalf of the BICA Council, Secretar-
iat and myself, let me take this oppurtunity
to wish you all a very prosperous and healthy
2012 and a pleasant festive season.
Pula Pula Pula
MESSAGE FROM THE PRESIDENT
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makes clear that smaller accountancy
practices need to address their skills
base, their working methods and their
referral models if they are to meet the
evolving needs of the SMEs that are
their lifeblood.
The study – The Role of Small and
Medium Practices in Providing Business
Support to Small- and Medium-sized
Enterprises, written by professors
Robert Blackburn and Robin Jarvis –
points out that accountants are still
SMEs’ most frequently used source of
advice. According to a study last year
by the UK’s Open University, trade
connections, the media, family and
friends are all important, but none
ranks as highly as the accountant.
SMPs are usually highly experienced
in dealing with SMEs and, as small
enterprises themselves, can empathise
with their clients’ resource constraints.
This contrasts with very large practices
where the focus is on large companies
and SME clients may have to deal with
several departments.
Building Trust
International Federation
of Accountant’s President
Robert L Bunting Says SMPs
Should Evolve to Satisfy
SMEs’ Growing Needs
Small- and medium-sized
practices (SMPs) today can
no longer rely strictly on
compliance work to pay
the bills. The reason why is simple: SMEs
(small- and medium-sized enterprises)
– the traditional client of the SMP –
increasingly need a broad range of
competencies beyond the core skill set
of the small practice. At the same time,
the threshold for mandatory statutory
audits has risen in some countries and
increases are under consideration in
many others.
A fast-changing and complex
regulatory environment means that
SMEs want their SMP to provide
proactive business advisory services.
SMEs need advice that will help them
generate business plans and financial
forecasts, identify and manage risk,
define and implement IT systems, and
value the business. SMPs must evolve
to meet these growing needs or face
dwindling clients and revenues.
A new study by the International
Federation of Accountants (IFAC)
The Evolution of SMPs
Robert L Bunting became president of the International Federation of Account-ants (IFAC) in November 2008. He is a partner at Moss Adams where he served as chairman and chief executive officer from 1982 to 2004. Moss Adams is a member of Praxity (formerly Moores Rowland International) where Bunting served as chairman from 1998 to 2004. From 2004 to 2005, Bunting was chairman of the Board of Directors of the American Institute of Certified Public Accountants (AI-CPA). Go to http://ifac.org/SMP for more about the SMP Committee.
THE EVOLUTION OF SMPs
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But the assumption that SMEs
nearly always choose an SMP is not
correct. A significant proportion of the
clients of large accounting practices –
the Big Four and second-tier practices
in most countries – are SMEs. These
are more likely to have the resources
and the benefits of economies of
scale to offer services and products
to meet their clients’ accounting and
other specialised support needs; in
fact, they often position themselves as
‘professional services supermarkets’.
Many SMPs actually use larger firms
to provide limited speciality services
to their SME clients or as a technical
backstop for their own client service
work. While compliance work will
remain hugely important for SMPs –
accounting services and tax are core
services at all levels in public practice
– technical competency and timely
delivery in compliance work build trust
and usually lead to requests for non-
compliance advice and support.
This is a time-proven formula driven
in part by the nature of most small
business owner-managers, many of
whom are determined to make all their
own decisions and avoid advertising
any managerial weakness. In this kind
of ‘fortress enterprise’ culture, many
SMEs do not request advisory services
until the expert has already provided
a specific demonstration of their
competency.
Becoming Knowledge Professionals
Business consulting services
represent a crucial growth area for
SMPs. As mentioned at the start, the
raising of the statutory audit threshold
has diminished a key revenue stream
for many SMPs and the market is
increasingly competitive. As a result,
if they are to thrive rather than merely
survive, SMPs must diversify and focus
on other advice requirements for SMEs
(or provide audit services to larger
companies).
They must develop their skills base
beyond bookkeeping, tax preparation
and audit. In short, they must move
from being accounting technicians
to knowledge professionals. So how
can SMPs overcome the unavoidable
resource constraints in-house and
provide a range of services to their
clients?
The most common model is to
expand the technical and soft skills of
existing personnel. Some accountants
can make the transition from ‘accounting
expert’ to management adviser through
experience and self development.
Others may need training or coaching
to grasp the necessary flexibility and
an understanding of the context and
cultural environment of the SME.
For example, accountants might
need to hone their interpersonal skills
or make time to discuss a client’s
succession planning (or other business
advisory needs). Another common
model is to focus on a specific industry
sector or speciality linked, for example,
to the music industry or environmental
legislation. This model usually works
best in large cities or where a particular
industry is highly concentrated. But
there have been successful cases where
SMPs are willing to travel further to
serve their clients.
A third model, which can be a
standalone strategy or one that
complements the first two, involves
the SMP participating in a high-quality
referral network. Before using one, SMP
owners should analyse the different
types of networks and carefully consider
how they will monitor service quality
and timelines for the clients they refer.
But referral networks offer SMPs many
potential advantages: they are an
effective way to satisfy the increasing
breadth of demands from SME clients.
They also offer the opportunity to gain
clients through referrals from other
network members or to win new ones
due to their more extensive service
capabilities.
Why SMEs Use SMPs
Competency: SMEs often lack the
full range of managerial expertise. Most
outsource their financial management
to SMPs with their required technical
competencies and expertise in statutory
audit and taxation.
Trust: As members of a regulated
profession with codes of conduct,
accountants enjoy ‘institutional’ trust.
Their provision of compliance services
wins them ‘competence’ trust.
Responsiveness/ proximity: SMEs
rate SMPs’ responsiveness to their
demands so highly that it can be
regarded as more important than
a qualification or competency. The
geographical proximity of SMPs to their
SME clients is also important. Many
owner-managers prefer face-to-face
meetings with their advisers, and value
ease of access.
The Role of Small and Medium
Practices in Providing Business Support
to Small and Medium-sized Enterprises
– by ACCA’s head of small business
Professor Robin Jarvis and Professor
Robert Blackburn of Kingston University
and published by IFAC –is available
for download at http://web.ifac.org/
publications/small-and-medium-
practices-committee/information-
papers-3.
This article originally appeared in the
ACCA’s Accountancy Futures.
A fast-changing and complex
regulatory environment means that
SMEs want their SMP to provide
proactive business advisory services.
SMEs need advice that will help them
generate business plans and financial
forecasts, identify and manage risk,
define and implement IT systems,
and value the business
THE EVOLUTION OF SMPs
6
Everyone wants to know:
how do entrepreneurs really
succeed? What is it that
catapults one of them, every now
and then, to greatness and financial
superstardom? What sparks that
immense capital accumulation? How
does it all come together?
Some people, mostly the type who
spend their lives on the outside looking
in, think they’ve got the answer. They
say it’s all about risk. They say big-time
entrepreneurs are bold gamblers. They
say the rich do things that would scare
most normal people away. They say big
success is a product of big risks.
Hang on. That’s not true at all. That’s
not even nearly true.
‘Let me tell you about the business
of risk,’ says BECI Marketing Manager,
Bonani Dube.
‘At BECI, we represent some of
Botswana’s most inspiring, hands-
on entrepreneurs – and let me
tell you: successful entrepreneurs
are extremely risk averse. They’re
conservative people. They minimise
their chances of failure. They don’t
do anything unless they know
they’ll win. So for them, it’s all about
avoiding risk,’ he explains.
Interesting.
Dube continues, ‘Rags-to-riches
entrepreneurs are good at shifting
the burden of financial risk onto other
people, or other organisations. They
always have a plan B if something
goes wrong – or if someone doesn’t
pay them. And that’s where we come
in.’
You see, BECI’s job, as a credit
insurer, is to insure all your credit
Playing with Fire
GROWING YOUR BUSINESS?Pay attention to this important advice from BECI.
GROWING YOUR BUSINESS
Advertorial:
sales and pay you out if one of your
customers defaults, doesn’t pay you
on time or doesn’t pay you at all.
He explains how credit insurance
works: ‘If you don’t have a credit
insurance policy, you’re running a risky
business. You’re exposing yourself.
You’re just assuming that everything
will be ok. And that’s not how smart,
successful, big-deal entrepreneurs
like to do business.
Dube says, ‘The truth is that
people who like risk tend to fail as
entrepreneurs. They’re not good at
drawing the line.’
And he has a point. Experience
has taught us that Botswana’s failed
entrepreneurs take on far too much
risk:
A written, clear plan for where ●the business needs to go is
essential. But many failed
entrepreneurs skip this step
Taking over an existing business ●is statistically a better bet. Most
failed entrepreneurs prefer to
start from scratch
Nine out of ten of Botswana’s ●fastest growing businesses sell to
companies. Failed entrepreneurs
tend to try market straight to
consumers
And the list goes on: they try to ●compete on price alone, they
under-emphasise marketing,
they don’t understand the
importance of financial
controls.
Dube concludes, with a smile.
‘Many of these risks reflect a lack of
preparation and foresight. At BECI,
our advice is this: Don’t play with fire.
Do what successful people do. Think
about risk, and think about it very,
very carefully.’
BECI Markerting Manager, Bonani Dube
8FRAUD FOCUS IDENTINY THEFT
Identity is defined as a set of
features and other characteris-
tics which uniquely describe an
object. Identity features can either be
tangible or intangible.
From human perspective, identity
comprises personal features and data
elements which, taken together, can
uniquely describe a particular person.
It is this uniqueness of personal data
which makes one’s identity an impor-
tant resource. The identity of people is
normally associated with their wealth,
lifestyles, and social status. Criminals
are aware that one of the most effective
strategy to evade the course of justice is
to change identity. Thus, the perception
of people towards a particular criminal
can change if the criminal successfully
change his name (which is associated
with crime) to someone else.
Banks, immigration, authorities
and law enforcement agencies need
one’s identity in order to make sure
that they are dealing with the right per-
son. The problem with human identity
is that it is documented in passports,
Omang, birth certificates, bank state-
ments, and other media. This makes
human identity prone to theft.
This article discusses identity theft
and explain why it is important for peo-
ple to safeguard their personal data.
Identity theft is a crime in which
FRAUDFOCUS
IDENTITY THEFT
a person wrongfully obtains and uses
another person’s personal data in some
way that involves fraud or deception,
for economic gain (Wells). The personal
data may include, name, address, date
of birth, Omang number, passport
number, credit card number and other
information.
How criminals use stolen identity
data
Once a person’s identity data is
stolen, the perpetrators can use it to
commit other crimes. For instance, if a
fraudster steals an Omang, or passport,
he can make minor alterations to the
victim’s image and use it to open bank
accounts, credit card accounts, Loan ac-
counts, utilities accounts, applying for
driving license, etc.
Case illustration
Here is an example illustrating how
serious identify fraud can be:-
When fraudsters steal personal
data (through omang, passport, etc),
they can use it to open a savings or
current account. Once an account is
opened, they make regular deposits to
the account for some time in order to
give the bank false security. They then
apply for huge loans or buy expensive
cars using the bank’s credit facility. They
even apply for credit card facility.
Once the bank gives them the
loans or credit card facility, the identity
thieves quickly withdraw all the money
from their account, utilize the credit
card facility to the maximum limit and
disappear. Investigations are then con-
ducted when the bank notice that the
loan and credit card accounts are not
being honored. To trace the culprit, the
banks rely on ‘stolen identity informa-
tion’, which the fraudster submitted.
The stolen identity information eventu-
ally leads the Police to an innocent per-
son who may be wrongfully arrested.
Profile of identity thieves
Although identity thieves can be
friends, employees, and relatives, most
of the fraudsters fall into one or more of
the following:
Illegal aliens needing new identi- ●ties to evade immigration authori-
ties or law enforcement agencies.
Former convicts who served time ●in prison and wish to conceal their
identity.
A university student looking for ●an easy way to work his/her way
Elliot Luka: FCCA; ACA;MBA;CFE
9
No. 1 F.C. of T v Commonwealth Aluminium Corporation
Limited (1980) 11 ATR 42, in Walpole, M (2001) Current
Issues in the Taxation of Intangibles. An Attempt to Tax
“Scotch Mist” ATAX Discussion Paper Series No 7
FRAUD FOCUS IDENTINY THEFT
through school. The most common
crime is where identity thieves use
someone’s certificates or degrees
to get jobs.
Criminals who want to launder ●money without trace.
Career criminals who want to rob ●banks and people
How identity thieves get information
from their victims
Here are some of the common
methods used by identity thieves to
get information from their victims.
Sorting through discarded rubbish ●in dust-bins.
Intercepting incoming or outgo- ●ing mail.
Using an accomplice within the ●organization. This method is com-
mon in financial institutions
Through certificates, diplomas, ●licenses placed on work place
walls
Soliciting information from victims ●through job application schemes
where applicants are given a form
to fill. The applicant is made to give
sensitive information in the form.
Using pretext calls where the ●fraudsters pretend to be a bank
manager wishing to ‘confirm’ some
information from the victim.
Preventing identity fraud
Some of the useful methods for
preventing identity theft include the
following
Before providing personal infor- ●mation, make sure the individual
or business requesting it has valid
reason for requiring the informa-
tion
Do not give identity information ●like Omang number, passport or
credit card number over a tele-
phone.
Never give identity information ●like passport number, account
number, on entry forms for ‘com-
petition’. Be suspicious if the com-
petition entry form ask for infor-
mation beyond your name and
contact address. Identity informa-
tion may be required only after
you have won the competition
and not before.
Keep your birth certificate in a safe ●place.
Close all unused credit card ac- ●counts. If possible make sure you
know your credit card account
number and the toll free telephone
number for your banker. This infor-
mation is needed when you want
to report stolen or lost card.
Avoid moving with a wallet full of ●credit or debit cards. Before set-
ting up for shopping, decide which
card to take. It is easier to report if
one card is missing rather than 6
cards from different banks!
Report to the police or relevant au- ●thorities immediately when identi-
ty documents are stolen or lost.
Next issue
The next issue will discuss Bribery
and Conflict of interest as two of the most
common types of corruption in both pri-
vate and public sector.
About Author: The author is an
expert in fraud Investigations and au-
dit solutions.
Elliot Luka; Email: CELL: 74119236
[email protected] ; [email protected]
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For merchandise enquiries contact Pule Mogale at 3972992
10SHORT STORY CORNER
Soon the hat began to fill up. A lot more people were giving money to the blind boy.
That afternoon the man who had changed the sign came to see how things were.
The boy recognized his footsteps and asked, “Were you the one who changed my sign this morning? What did you write?”
The man said, “I only wrote the truth. I said what you said but in a different way.” I wrote: “Today is a beautiful day but I cannot see it.”
Both signs told people that the boy was blind. But the first sign simply said the boy was blind.
The second sign told people that they were so lucky that they were not blind.
Should we be surprised that the second sign was more effective?
Moral of the Story: Be thankful for what you have. Be creative. Be innovative. Think differently and positively. When life gives you a 100 reasons to cry, show life that you have 1000 reasons to smile.
Face your past without regret. Handle your present with confidence. Prepare for the future without fear. Keep the faith and drop the fear.
The most beautiful thing is to see a person smiling…
And even more beautiful, is knowing that you are the reason behind it!!!
“I am blind, please help.”
A blind boy sat on the steps of a building with a hat by his feet. He held up a sign which said: “I am blind, please help.” There were only a few coins in the hat.
A man was walking by. He took a few coins from his pocket and dropped them into the hat. He then took the sign, turned it around, and wrote some words. He put the sign back so that everyone who walked by would see the new words.
11
No. 2 Greenhill,C .R. & E.O. Herbolzheimer (1981) Control of transfer prices in international transactions: The restrictive business prac-tices approach. In R. Murray e,d., Multinationals beyond the market, 185-94. New York: John Wiley and Sons, in Al-Eryani, M.F, Alam, P & S.H.Akhter (1990) Transfer Pricing Determinants of US Multinationals. Journal of International Business Studies. Vol. 21 No. 3, pp.409-425.
INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS (IPSAS)
Most central governments
in the world use a cash
based accounting sys-
tem, though increasingly states are
seeking to embrace accruals account-
ing to better understand their assets
and liabilities and to smooth cash flows
on capital investments. The emphasis
on the cash based system is both his-
toric and logical – the logic being in
relation to the usual mechanism for
disbursing government funds as an ap-
portionment through budgets of annu-
al tax receipts. Local arrangements have
in many cases led to the development
of hybrid systems which incorporate
some element of accruals accounting,
if only in respect of reporting long term
liabilities. But it is widely recognised by
states around the world that, while re-
specting local specifics and aligning to
annual budgets is important, the con-
sistent application of an accruals based
approach brings real benefit.
This article seeks to give a brief
overview of the International Public
Sector Accounting Standards (IPSAS),
which are an internationally recognised
mechanism by which governments can
standardise their accounting approach.
They are normally broken down into
two types:
Cash based: Set of principles and • good practice policies adopted by
public sector entities to bring con-
sistency to the cash accounting of
government entities.
Accruals based: Set of detailed • standards that provide a frame-
work for accounting for the specific
requirements of government enti-
ties, in a manner which is consis-
tent with private sector accounting
approaches.
In terms of sheer volume this split
is quite misleading: there is only one
cash based IPSAS, while there are thirty
one accruals based ones in the 2011
handbook. However, adoption of the
former is an essential first step for any
government planning to move to ac-
cruals based accounting; further, the
emphasis reminds governments using
their own disparate cash accounting ap-
proaches that there exists a framework
around which they can standardise
their current accounting practices.
IPSAS are intended to improve
the quality of general purpose finan-
cial reporting by public sector entities,
with the intention of allowing better
informed assessments of the resource
allocation decisions made by govern-
ments, thereby increasing transparency
and accountability. They are produced
by the International Public Sector Ac-
counting Standards Board, which is an
independent organ of IFAC and which is
constituted in a similar way, and issues
its pronouncements in a similar fashion
(using exposure drafts etc), to the more
familiar Accounting Standards Board.
IPSAS provide a framework for ac-
counting for public finances which is
convergent with internationally recog-
nised financial reporting standards. This
is because IPSAS are derived from IFRS
and represent an adaptation of these
standards to apply consistent prin-
ciples to the nuances of public sector
accounting. For this reason, the public
sector standards do not apply to Gov-
ernment Business Enterprises (GBEs, ie
parastatals), which are entities that es-
sentially operate within the private sec-
tor, though owned by organs of state,
and which apply IFRS. However, while
these entities themselves may produce
IFRS compliant accounts, a proper un-
derstanding of the whole activity of
government requires that their results
are consolidated within the govern-
ment’s financial statements. This is a
requirement even of the cash based IP-
SAS which has generally represented a
significant hurdle to full compliance for
countries which have decided to follow
that path.
The comparability between IPSAS
and IFRS serves several important pur-
poses, not least of which is assisting
users of the accounts by presenting
financial statements which are con-
sistent with more familiar company fi-
nancials. Another benefit which might
appeal to BICA members is that they
make it easier for accountants to move
between public and private sectors,
thereby helping spread best practice
across sectors.
A number of other benefits in the
full application of IPSAS have been
identified by The United Nations Gen-
eral Assembly, which adopted them in
2006 and noted the following:
transparency in respect of assets
and liabilities generally.
-
counting practices through the
application of credible, indepen-
dent accounting standards on a
full accrual basis.
-
tion about costs that will better
support results-based manage-
ment.
-
able equipment into the ac-
counting system, with resulting
improvements in the accuracy
and completeness of non-ex-
pendable equipment records.
-
parability of financial statements
as a result of the detailed require-
ments and guidance provided in
each standard.
IPSAS
Mark Sims ACA, CPFAMark works in the Advisory team at KPMG Bo-
tswana, where he specialises in public sector issues.
He is currently vice-Chair of BICA’s Public Sector
Committee.
12
A further benefit relevant to coun-
tries like Botswana which receive devel-
opment aid, particularly since such aid
is increasingly being channelled directly
through governments by donor agen-
cies, is the increased assurance which
compliance with IPSAS will provide. As
the traditional donor states struggle to
dig themselves out of recession it is likely
that the little development aid they are
able to provide will be directed to those
states in whose public finances they have
most confidence.
The East and Southern African Asso-
ciation of Accountants General member
states’ aims include adoption of IPSAS
and membership of this organisation
includes Botswana and extends widely
across SADC. Although Africa is not over
represented in the list of over 70 states
which are in the process of complying
with either cash or accruals IPSAS, South
Africa is relatively advanced
by global standards. This is
because they have devel-
oped their own set of accruals
standards which have been
approved as consistent with
IPSAS, while allowing for lo-
cal variation, and which have
been widely implemented.
IPSAS support effective
accounting for public funds,
assets and liabilities, but they
should be placed in the wider
context of supporting robust
public financial management
(PFM). A good PFM system is
defined by the Public Expen-
diture and Financial Accountability Sec-
retariat (PEFA) at the World Bank as “es-
sential for the implementation of policies
and the achievement of developmental
objectives by supporting aggregate fis-
cal discipline, strategic allocation of re-
sources and efficient service delivery.”
Aspects of such a system include:
Credibility of the budget - The bud-• get is realistic and is implemented
as intended
Comprehensiveness and transpar-• ency - The budget and the fiscal
risk oversight are comprehensive,
and fiscal and budget information
is accessible to the public.
Policy-based budgeting - The bud-•
get is prepared with due regard
to government policy.
Predictability and control in bud-• get execution - The budget is
implemented in an orderly and
predictable manner and there are
arrangements for the exercise of
control and stewardship in the
use of public funds.
Accounting, recording and re-• porting – Adequate records
and information are produced,
maintained and disseminated to
meet decision-making control,
management and reporting pur-
poses.
External scrutiny and audit - Ar-• rangements for scrutiny of public
finances and follow up by execu-
tive are operating.
The impact of effective application of
IPSAS would be far wider than in the
accounting, recording and reporting
aspects noted above. Implementation
of IPSAS would affect all the systems
and processes used to derive financial
reports for the year end, including for
example, not just developing systems
for the accurate valuing of property
and inventory (including the systems
for managing inventory, stock counts
etc), but the identification of sufficient
numbers of trained individuals to carry
out the property, equipment and work
in progress valuations required at year
end.
The World Bank says that “high-quality
financial reporting in the public sec-
tor is the basis for accountability and
transparency in PFM.” The financial
reports represent the outturn of the
budgetary process, whether or not
government has delivered the bud-
geted expenditure. In lieu of more so-
phisticated measures of performance,
this provides a basic measure of the
delivery of government policy. To put
it another way, effective PFM depends
on the consistency and direction which
IPSAS can provide to management of
underlying activities and to financial
reporting.
States across both the developed
and developing worlds are working
hard to identify means of demonstrat-
ing the effective application of public
funds in pursuit of objectives mandat-
ed through the democratic process, i.e.
election promises and party manifestos
and legislation. In the UK, for example,
where I trained, central
government has adopted
full accruals accounting in
accordance with an IFRS/
IPSAS compliant approach
called “resource account-
ing”. This allows depart-
ments to develop reports
which show how much
money have been spent
on a particular govern-
ment policy, like reduc-
ing the number of smok-
ing related deaths at the
Department of Health, or
increasing the number of
children passing literacy
and numeracy tests at the Department
of Education, and how that expenditure
relates to the results obtained.
While IPSAS may not be applicable
to government business enterprises,
the wider context of PFM within which
they operate can help us think usefully
about how GBEs report their activities
and are held accountable. Govern-
ments can require additional disclo-
sures which show how parastatals are
supporting the delivery of government
policy, much as government depart-
ments in the UK show how their activi-
ties contribute to the delivery of out-
comes.
INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS (IPSAS)
The comparability between IPSAS
and IFRS serves several important
purposes, not least of which is
assisting users of the accounts by
presenting financial statements
which are consistent with more
familiar company financials.
13IPSAS
14
Deloitte (Botswana) was the first
organisation in Botswana to become
a Platinum Accredited Employer in
2007. Following a comprehensive and
detailed assessment in late 2010, the
Firm is proud to announce that it has
been re-accredited at the Platinum
level. Deloitte (Botswana) remains as
one of only 5 employers in the country
and less than 10% of employers globally
who have achieved this elite status.
The ACCA Platinum Approved
Employer status recognises the
Firm’s high standards of staff training
and development and gives formal
recognition that:
Deloitte (Botswana) is committed • to providing learning and
development opportunities to its
professionals at all levels.
Deloitte (Botswana) meets • global standards in learning and
development support.
To exemplify this, the Firm provides full
financial support to its trainees as well as
paid leave and the opportunity to attend
relevant courses. In the workplace, each
trainee is assigned a mentor who meets
regularly with the trainee, guiding him
or her along their learning pathway.
Deloitte (Botswana) continues to add
to the long list of employees who have
attained ACCA Associate Membership
with a further seven staff members
recently admitted to this qualified
membership of ACCA. The seven
(pictured below) gained their ACCA
qualification while working their way
“up the ranks” in the audit division
where they are now operating as senior
Deloitte (Botswana) Re-Accredited At Acca Platinum Status Level
Mrs Pragna Naik, Partner of Deloitte (Botswana), receives the Firm’s Platinum Approved Status certificate
from Mr Michael Gora, Country Manager for ACCA Zimbabwe.
Deloitte (Botswana)
meets prestigious
benchmark again
professionals.
The Firm’s new Associate ACCA
members.
Remarking on the achievements of
these seven employees, Max Marinelli,
Partner-in-Charge of the Deloitte
(Botswana) practice explains, “Our
commitment to the training and
development of our staff is just one of
the many ways that we invest in our
people. We provide a whole framework
of systems and processes that assist our
young professionals to acquire their
professional qualifications and gain
the necessary work experience to build
their skills and meet key accounting and
auditing competencies.”
Deloitte (Botswana)
realises the benefits of its
ACCA Platinum status
From left to right, front row, Boitumelo Maoketsa, Dimpho Thekiso, Gosegomang Modise
Back row, Goemeone Makgona, Ephifania Nkanga, Idah Nkoloi, Refilwe Tshepiso Tuelo
Our commitment to the training
and development of our staff is
just one of the many ways that
we invest in our people.
DELOITTE (BOTSWANA) REACCREDITED AT ACCA PLATINUM STATUS LEVEL
Advertorial:
15
The BICA QUALIFICATION
THE BICA QUALIFICATION
BackgroundThe Accountants Act No. 12 of 2010
passed in Parliament at its July/August 2010 session became effective on April 1, 2011 through Statutory Instrument No. 21 of 2011.
The Act, among other things, es-tablishes the Botswana Professional Accountancy Qualification, BICA, which is benchmarked against the Institute of Chartered Accountants in England and Wales (ICAEW), one of the world`s leading professional accountancy bod-ies. The BICA qualification, which is Botswana’s own professional accoun-tancy qualification, was launched on 29th April 2011, with its first intake of students in July 2011. The next intake of students will commence its studies in January 2012.
In this article we will attempt to explain the key elements of the BICA qualification.
Elements of the BICA qualificationThe BICA qualification has four es-
sential elements: exams, technical work experience, initial professional develop-ment and structured training in ethics. Students cannot qualify without com-pleting and passing all four elements.
Along with these four elements, BICA requires students to have:
a BICA training agreement; and ●six-monthly reviews throughout ●their training.
Students with other relevant quali-fications or previous work experience may be eligible for full or part credits at some of these elements.
BICA examinationsThe BICA qualification comprises
two stages - the Professional Stage and Advanced Stage. There are 15 exams al-together - 12 at the Professional Stage and 3 at the Advanced Stage (see the diagram below).
Professional StageThe Professional Stage consists of
knowledge modules which provide an introduction to the core concepts un-derpinning accountancy, and the ap-plication modules which demonstrate how a student can build on knowledge in practice.
Knowledge modulesEach knowledge module assess-
ment is 1.5 hours long and each exam will be e-assessed (computer-based), except for Principles of Taxation and Law which have paper-based exami-nations. Computer-based assessments can be taken at any time (subject to availability) at BICA-approved test cen-tres. Principles of Taxation and Law are examined twice per year through pa-per-based exams of 1.5 hours long each and are sat at BICA exam centres.
Application modulesThe Application modules are as-
sessed twice a year through paper-based exams of 2.5 hours long each and are sat at BICA exam centres.
The pass mark for the Professional Stage modules is 55%.
There are no regulations which stipulate the order in which students must attempt the Professional Stage modules. Accordingly, employers are able to design training programmes according to their business needs, sub-ject to modules offered by learning in-stitutions at any given time if students wish to study with an educational insti-tution.
Students are allowed a maximum of four attempts at each Professional Stage module.
The Professional Stage has to be completed first before a student can proceed to the Advanced Stage.
FTJ NdekeBAcc, MSc (Acctg & Fin), FCCA, FCA
Director, Training & Professional Development,
BICA
1 2 3 4 Exams TWE IPD STE 15 exams, including 450 days of technical Initial professional Structured the Case Study in work experience development training in ethics the final year of your within your period period of approved of approved training training
The four essential elements of BICA training
Management Information
Accounting Law Principles of Taxation
Assurance Business and Finance
ETHICS
Knowledge modules
Financial Management
Financial Accounting
Financial Reporting
Audit and Assurance
Taxation Business Strategy
ETHICS
Application modules
PROFESSIONAL STAGE
ADVANCED STAGE
Advanced Taxation Corporate ReportingBusiness Analysis Advanced Audit & Assurance
ETHICSETHICSETHICS
ETHICS
Case Study
ETHICS
Integrated ethics training throughout to support business decision-making
Work experience puts your learning into context
IPD – initial professional development enables skills progression in five key areas
BICA EXAMINATION STRUCTURE
1 Paper combining both 1 Paper combining both
16THE BICA QUALIFICATION
Some of the BICA students who enrolled in July 2011
Advanced StageThe Advanced Stage consists of
two modules and a Case Study.The two Advanced Stage modules
are assessed twice a year through pa-per-based exams of 3.5 hours long each and are sat at BICA exam centres. The two modules have four syllabuses but only two exams which comprise two sections, A and B, and candidates must achieve the pass mark in each section. Students can take the examinations in any order, with the exception of the Case Study. To attempt the Case Study, students must have begun the final year of their training contract.
Case StudyThe Case Study requires students to
apply a depth of technical knowledge, integration of learning from across the syllabus and a demonstration of strate-gic business skills. The Case Study lasts 4 hours and is sat at BICA exam centres twice a year.
The pass mark for the Advanced Stage modules and the Case Study is 50%.
Technical Work Experience (TWE) Each student must complete a
minimum of 450 days of TWE during the duration of the training agreement (this excludes exam days, holidays, courses, study leave, illness and office administration).
TWE is undertaking ‘real’ work of a financial, business and/or commercial
nature. It can include (but is not limited to) one of the following: Accounting, Audit and Assurance, Taxation, Finan-cial Management, Insolvency and In-formation Technology. Technical work experience can be in just one area but a variety of work experience allows stu-dents to gain breadth as well as depth of understanding.
TWE gives the students the oppor-tunity to:
apply the technical knowledge ●gained during their studies
develop their personal effective- ●ness
develop business awareness skills ●exercise professional judgement. ●
Students with previous work ex-perience or some other professional qualifications may be eligible for 12 months credit for prior work experi-ence and would be required to do 300 days instead.
Initial Professional Development (IPD)
Initial Professional Development is designed to help students integrate their exam studies, technical work ex-perience and the development of their professional skills.
The IPD scheme ensures students develop the added value skills that help set them apart as a chartered ac-countant. IPD focuses on five key skill areas:
ethics and professionalism ●
personal effectiveness ●technical and functional expertise ●business awareness ●professional judgement. ●
Students develop these skills through on-the-job learning such as discussions with more senior staff, shadowing, mentoring, events and in-house training.
Employers can use their own or-ganisations’ professional develop-ment scheme where it is accredited by BICA or students can follow BICA’s IPD scheme.
Structured Training in Ethics (STE)
The BICA qualification is unique in requiring sustained and compre-hensive ethics learning throughout the full length of a student’s training. The structured training in ethics (STE) programme is an online training and assessment package based on interac-tive case studies, scenarios and self-test questions. There are three stages to the STE programme which must be com-pleted throughout a student’s training.
The STE programme will enable students to:
identify and analyse ethical issues ●develop their knowledge and un- ●derstanding of ethical guidance
and theories
become familiar with the BICA ●ethical guidance
apply the fundamental principles ●
17THE BICA QUALIFICATION
and other guidance in a practical
way to resolve dilemmas.Training Agreement
To qualify as a chartered accountant all students must complete a training agreement with a BICA authorised train-ing employer (ATE).
The training agreement is a written and signed agreement between a BICA student and their authorised training em-ployer. It is very different to an employ-ment contract. It outlines the commit-ment made by the employer to provide high-quality training to the student, and the commitment made by the student to contribute to their employer throughout their training. The employment contract and the employment laws of the Repub-lic of Botswana will always supersede the power of the training agreement in rela-tion to matters of employment.
A training agreement must be for a minimum of 36 months and a maxi-mum of 60 months, unless the student is a member of ACCA, CIMA or CIPFA, in which case the training agreement can be for a minimum period of 24 months.
A student can study for the BICA qualification independently of a BICA Authorised Training Employer (ATE). However, to qualify and gain BICA mem-bership, such a student will need to suc-cessfully complete all the four essential elements of BICA training – exams, IPD, STE and TWE – and a period of approved training with an ATE. As an independent student, one can study and sit for all the BICA exams (except for the Case Study). Students can only apply for and sit the Case Study exam once they have begun the third year of their period of approved training.
Six Monthly Reviews BICA requires ATEs and their stu-
dents to meet at least twice a year to discuss the students` progress and de-velopment.
BICA MembershipStudents will be ready to apply for
membership of BICA once they have:
Successfully passed all the BICA ex- ●ams
Completed the Initial Professional ●Development (IPD) programme
Completed the Structured Training ●in Ethics (STE) programme, and
Completed the approved Techni- ●cal Work Experience (TWE) pro-
gramme.
BICA membership will entitle the students to use the letters ACA after their names.
Entry RequirementsThe following qualifications will be
accepted for entry to the BICA qualifi-cation:
2 A Level passes plus 3 GCSE pass- ●es at Grades A-C.
Certificate in Accounting and Busi- ●ness Studies (CABS)
Diploma in Accounting and Busi- ●ness Studies (DABS)
HND from the former Botswana ●Institute of Administration and
Commerce (BIAC)
International Accounting Techni- ●cian Qualification from BICA
Student of AAT who has achieved ●NVQ Level 3 Intermediate Stage
AAT Graduate ●CAT ●Any university degree recognised ●by the Institute as equivalent to a
degree from the University of Bo-
tswana
ACCA student – who has passed at ●least ACCA Part 1.
CIMA student – who has passed at ●least CIMA Certificate in Business
Accounting.
Member of ACCA or CIMA or any ●other IFAC recognised professional
accounting body.
Other professional and vocational
qualifications:
Associate of the:
Association of Business Executives ●(AMABE)
Association of Cost and Executive ●Accountants (ACEA)
Association of International Ac- ●countants (AAIA)
Association of Taxation Techni- ●cians (ATT)
Chartered Institute of Bankers ●(ACIB)
Chartered Insurance Institute ●(ACII)
Chartered Institute of Personnel ●and Development (AssocCIPD)
Chartered Institute of Taxation ●(CTA)
Institute of Actuaries (AIA) ●Institute of Chartered Secretaries ●and Administrators (ACIS)
Institute of Commercial Manage- ●ment (AMInstCM)
Institute of Financial Accountants ●(AFA)
Other qualifications that match A level standard may be considered on individual application to BICA.
Local Qualifications must be from Tertiary Education Council (TEC) approved institutions.
Exemptions or Credits for Prior Learning (CPL)
Exemptions or credits for prior learning (CPL) are available for the Pro-fessional Stage modules if one has an accounting or business related degree, AAT, CAT, or a professional accountancy qualification such as ACCA and CIMA. Exemptions for other relevant qualifi-cations will be determined on a case by case basis.
Becoming an Authorised Training Employer
An employer needs to meet the BICA Training Standards to start train-ing BICA students. This helps ensure consistency of support and training to BICA students across the whole spec-trum of employers.
There are five key principles to BICA Training Standards:
to operate with professionalism ●and commitment to BICA training;
to provide students with a suitable ●training environment;
to offer students appropriate su- ●pervision and support;
to offer students the opportunity ●for personal and professional de-
velopment; and
to offer students appropriate train- ●ing in professional ethics.
Becoming an authorised training employer (ATE) is a straightforward process. To become authorised to train BICA students, please download and complete the Register as a Training Em-ployer application form at www.bica.org.bw. Our Training and Professional Development staff will visit your office and help you through the process. They can be contacted on +267 3972992.
18
September
2011
President’s Cocktail
6
1
4
3
2
7
109
5
8
1. Finance & Admin Committee member Devaprasad Arakkal,
BICA President, Vijay Kalyanaraman and Public Sector Com-
mittee member Mark Sims.
2. The guests listening attentively to the President’s speech.
3. BICA members Ajay Bhatnagar, Sashi Kumar Velambath were
also in attendance.
4. Mark Sims, BICA Admin Manager Regina Ramanteba and
Chairperson of the Public Sector Committee Lily Matenge
sharing a light moment.
5. BAC’s David Cropper chatting to ACCA’s Mike Gora.
6. BICA members Peter Kesitilwe and Boemo Gaolathe.
7. BICA CEO Duncan Majinda kikstarting proceedings.
8. L-R; BICA members Cecilia Ramatlapeng, Mythri Sambasivan-George
and BIA ex-President John Stevens.
9. Ernst & Young Managing Partner Bakani Ndwapi, Duncan Majinda
and Ananth Ram of Botho College.
10. Some of the guests in attendance.
19
Globally connected
Locally relevant Always
extraordinaryAfrica is a complex continent. It
is multi-cultural, multi-lingual, geographically vast and steeped
in political history. It also has enormous potential and many
untapped opportunities.
KPMG has both the local skills and access to global
expertise needed to understand and operate seamlessly across the
continent.
We offer quality, consistent and efficient
services to all our local, national, regional and
multi-national clients.
For more information,
please contact us on +267 391 2400 or e-mail
enquiries@
kpmg.bw
kpmg.com/bw
© 2011 KPMG Botswana, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International. MC7070
20
Most businesses are hanging
by the thread, with the
cash flows considered the
lifeblood of a business becoming tighter
by the day. Just when we thought we
should be popping the champagne
bottles as we believed that the world
was coming out of the economic ‘ICU’,
the situation worsened due to the fear
of a double dip recession.
Financiers know that they make
money from lending. However, this
is not the time especially lending to
businesses experiencing symptoms of
severe cash flow problems. Banks are
not available to give alms they are in
business.
Especially vulnerable in this
situation are the SMES as they normally
experience difficulties in accessing
finance in good times worse still in the
current bleak economic environment.
That begs the question,
where will cash come from?
Largely the answer lies in the better
management of working capital or
simply put going back to the basics
of cash flow management. It is at
this particular time that it becomes
imperative to seriously look at the
entrenched management policies and
procedures and analyse their impact
on the business cash flow and eventual
profitability.
In trauma cases, doctors fully know
that the priority in such situations is to
first and foremost stop the bleeding.
In this economic emergency
situation, the responsibility of any
management should be to stop the
cash haemorrhage. The management
must also identify the policies which
inadvertently could be contributing or
drilling holes in the business reserve
resulting in cash haemorrhage.
I thought in this edition, I should
look at two practices, self inflicted by
management but which affect the
customer who brings cash into the
business. I will focus on parking area
and managing the frontline staff.
Fortune 500 magazine, identified
three cardinal success factors for the
top managers in the world:
Car Parking
Let me start with focus on the
customer and see how this is reflected
in the policy regarding parking at
business premises.
If you have been a victim and
most of you have been, would know
how frustrating it is to struggle to find
parking space whilst all the available
parking slots are reserved for ‘directors,
managers...’. The customers who should
be bringing in money to pay salaries
for the directors...are denied parking
at the behest of the overzealous
security guards. Sometimes, these
customers are also threatened with
fines or having their cars clamped for
parking in ‘reserved’ parking slots. The
irony of this is that after the customer
finally finds parking space may be by
the roadside he enters the office to be
greeted by an emblazoned statement
that cynically says, ‘Our Customer First’
or ‘We Value our Customers’. If only
managers realised who pays their
salaries, holidays and the other fringe
benefits, who do you think would have
exclusive parking space?
The situation above shows that
there is a clear disconnect between
management and the customers who
are the reason for being. It is time to look
at this policy and realise what impact it
has on our customers who bring in cash
into the business. Does your policy
encourage customers to come to you
or does it chase them away?
Frontline Staff
I recently went into a public toilet at
the Oliver Tambo International Airport. I
received a welcome from a cleaner that
LEAKY BUCKET PART 6
Author: J.M. Pongaponga (FCCA,FCA, MBA) – Managing Consultant, Celavie Business Consultancy
HOW MANAGEMENT
POLICIES IMPACT ON
CASH FLOWS?
Contd on Page 22
THE LEAKY BUCKET SYNDROME PART 6
22
made me think about the joy of doing
what one enjoys. As I entered the toilet,
this guy with a broad smile said to me,
‘ welcome to my office sir’. I said wow...
It reminded me of
Marcus & Buckingham
who said, ‘there is
nobility in every role’.
To what extent do
management policies
go to show that the
front line who are
effectively the face of
the organisation are
made to feel important and dignified.
How much time do we personally
spend to ensure that our faces are
presentable in public. How many times
have you ‘fallen’ for someone because
of their pretty face?
The front line staff represent that
face. ‘Do you know Margaret...? Which
Margaret...? I mean the cleaner. Oh...
is that her name?’ Many of us would
identify with this situation. Now, if the
front line staff are not given recognition,
what does that do to their feeling of self
worth? Self motivated
front line staff will go
out of their way to
serve customers with
zest and vim. These
front line staff control
the experience of
the customer from
start to finish. The
customers who are
better cared for are bound to return
and do business with your organisation,
bringing in cash...the life blood of your
organisation.
Isaac Newton said ‘If I have seen
further it is only by standing on the
shoulders of giants’. These front line
staff are giants on which to build your
organisation. How feeble should the
knees of your front line be? To succeed
in the ever competitive economic
environment requires commitment to
taking care of employees who take care
of the customers.
As the world enters into the fearful
period of economic uncertainty, it is just
fair that you look at your organisation
critically and analyse whether your
management policies regarding
customers and employees are drilling
holes causing cash haemorrhage in
your bucket and thus threatening your
survival.
Author: J.M. Pongaponga (FCCA,FCA
Bots, MBA) – Managing Consultant,
Celavie Business Consultancy Sources
– Kaiser K and Young D : Harvard
Business Review, May 2009
Break All The Rules(2001)
In this economic emergency situation, the responsibility of any management should be to stop the cash haemorrhage. The management must also identify the policies which inadvertently could be contributing or drilling holes in the business reserve resulting in cash haemorrhage.
Contd from Page 20
THE BICA QUALIFICATION TEAM
Behind every successful proj-
ect or huge endeavor is a
powerful and coordinated
project team. The BICA qualification
project has been an unparalleled suc-
cess, and tribute should be paid to the
project team and the very supportive
stakeholders.
Right from the beginning, the
Minister of Finance and Development
Planning, Hon. O.K. Matambo, had a vi-
sion of the project succeeding even at a
time when the Institute itself had some
running were expedited. BICA is grate-
ful for the role the Executive Secretary
of TEC, Dr Molutsi, personally played in
this regard.
The heads of accredited tuition
providers Botswana Accountancy Col-
lege and Botho College, Mr. Michael Le-
solle and Mrs. Sheila Raja Ram, respec-
tively, provided the required leadership
to ensure that the BICA programme
commenced as scheduled in July 2011.
The Council of the Institute led by
its President, Mr. Vijay Kalyanaraman,
and the Chief Executive Officer, Mr.
Duncan Majinda, with the support of
the past presidents of the Institute and
various Committees of Council were
also pivotal in ensuring that the project
was a success.
One can say without a shadow
of doubt that the project would have
been doomed without the tremendous
support from the Institute of Chartered
Accountants in England and Wales.
Please join me to salute the proj-
ect team. What a team!!!!
doubts mainly because of the magni-
tude of the project and the resources
implications. The Minister fought tooth
and nail in Parliament to ensure the Ac-
countants Act 2010, and its sister Act -
the Financial Reporting Act 2010, were
passed in record time.
The Ministry secured some fund-
ing from the World Bank and also facili-
tated the engagement of the Institute
of Chartered Accountants in England
and Wales as the twinning partner for
the Institute to ensure that the new
BICA qualification could be of the high-
est possible standard. The Ministry fur-
ther persuaded Parliament to provide fi-
nancial support to the Institute to build
its capacity. BICA and the accounting
profession in general is grateful for the
phenomenal role the Ministry, and Hon
Matambo in particular, played in en-
hancing the BICA Secretariat`s capac-
ity.
The Tertiary Education Council
(TEC) ensured that the required approv-
als for the BICA Qualification to start
THE BICA QUALIFICATION TEAM
Duncan Majinda, BICA CEO
MAAT, MBA (Finance), FCCA, FCA
‘YOUR COMPETITIVE ADVANTAGE’
24BICA SPORTING & SOCIAL EVENTS
2525BICA SPORTING & SOCIAL EVENTS
IFSC Career fair 2011...BICA OUTREACH PROGRAM:
26
The time of National Budget
announcement by any
Minister of Finance in
any country creates an
atmosphere of mixed expectations
both in the pre and post budget
announcement. The expectations
range from that of trepidation to hope.
The fears are that the Minister would
focus on increasing direct and indirect
taxes. The hopes are premised on the
anticipation that the Minister ought
to be conscious of the socio-economic
challenges that business and ordinary
people would be grappling with at any
given point in time. It is indeed that
time of the year when any Minister of
Finance experiences one of the most
torrid times in their tenure as they get
both salutary praises and condemning
criticisms about the budget policies/
propossals.
One of the most critical components
of the budget is to look at fiscal policies-
tax reforms being on the top of the
agenda in as far as the fiscal aspect
of the budget is concerned. Ministers
of Finance the world over have to
find ways and means of financing the
recurrent budget expenditure and tax
is one of the easiest ways of doing so.
Easiest in the sense that one cannot
choose whether or not to pay tax-we
all have to pay tax if we are gainfully
employed and/or are carrying on trade
as envisaged in the tax laws of the
country. The reader should be aware
that when the Minister announces a
budget one of the main focus areas
is on enhancing the administrative
capacities of the revenue collection
arm of the government-in our case
the Minister would seek to improve
the revenue collection capabilities of
Botswana Unified Revenue Services
(BURS). World-wide today’s tax
practitioners face enormous challenges
as governments formulate policies that
are aimed at broadening the revenue
base. In the same vein businesses
face similar problems especially in the
highly emotional and charged area of
tax evasion and tax avoidance.
From a tax planning vantage point
the solution is to seek the expert
advice of competent tax advisors who
will explore the various alternatives of
minimising tax exposure within the
confines of the tax laws of the country.
The advice is not to confuse tax evasion
for tax planning. Tax planning is
legally permissible and tax evasion is
legally undesirable and attracts severe
penalties.
Tax avoidance and tax planning
The distinction in the tax law
between tax evasion and tax avoidance
and between legitimate tax planning
and undesirable tax avoidance could
be analysed in terms of whether or not
they confer the rights to legitimate tax
TAX PLANNING,TAX AVOIDANCE ANDTAX EVASION
From a tax planning vantage point the solution is to
seek the expert advice of competent tax advisors
who will explore the various alternatives of minimising tax
exposure within the confines of the tax laws of the country.
AT A GLANCESimon Goude
TAX: PLANNING, AVOIDANCE, & EVASION
27
planning. The following distinction is
critical:
Tax evasion is the deliberate
escaping from tax which is properly
chargeable. It attracts various levels of
penalties. The Commissioner General
has extensive powers given to him
by the tax laws and can invoke the
relevant provisions of the Acts(Income
Tax or VAT) in the exercise of powers
conferred to him under those Acts.
Tax avoidance is a result of some act
by which a person so arranges his affairs
in such a manner that he is liable to pay
less tax than he would otherwise have
paid but for the arrangement. His or
her activities constitute legitimate tax
planning or mitigation, except so far as
they are curtailed by anti-tax avoidance
provisions, in which case they become
undesirable tax avoidance and the tax
authorities may set aside or disregard
such an arrangement or scheme. The
taxpayer’s right to seek to avoid tax
, by lawful means, that is , to reduce,
minimise, mitigate, nullify or simply
defer a liability to pay tax is found in
many judicial precedents. There is
abundance of decided cases where
taxpayers have paid less tax than they
would have otherwise paid thanks to
the careful tax planning of an astute tax
practitioner.
The reader must bear in mind that
although tax avoidance is at law legal
many tax regimes provide for anti-
tax avoidance provisions in order to
counter undesirable tax avoidance
schemes or arrangements designed to
avoid paying tax.
A detailed discussion on tax
planning, tax avoidance and tax evasion
will follow in future articles.
About the author
Simon Gonde is a Tax Manager in
the tax division at Deloitte & Touché
(Botswana). He has extensive practical
and theoretical knowledge in the tax
laws of Botswana, South Africa and
Zimbabwe. He is a member of C.I.S
(Zimbabwe) and Botswana Institute of
Chartered Accountancy (BICA) and also
holds an MBA qualification. In addition
he is a holder of a post graduate
qualification in Strategic Tax from the
University of South Africa (UNISA). He
can be contacted on sgonde@delotte.
co.za or telephone (+267) 395 1611 or
cell (+267) 74 13 94 58.
1APR
11 - 31 MAR12
TAX: PLANNING, AVOIDANCE, & EVASION
28
Living in a global village has created
competition in all aspects of life and or-
ganisations have not been spared from
the competition. In order for an organi-
sation to be successful, it needs every
advantage.
Quality and price are important to
business success, but satisfied clients
are the life source of all businesses.
Happy (hence likely to be loyal) clients
will choose your products or services
over a competitor’s even if there is no
difference in quality and the price is a
little higher. This kind of loyalty increas-
es profitability and improves an organi-
sation bottom line.
In order to satisfy clients, one
needs to be closely in touch with them
so that they are aware of the client’s ex-
pectations.
How do you determine ifclients are satisfied with your business?
In short – ask them! When you are in
touch with your clients, you are likely to
know areas in the value chain in which
you are falling short and need to im-
prove.
Information can be obtained us-
ing a client survey. Compile a short
questionnaire (3 or 4 questions), make
copies and place these at your service
points. Assign a junior staff member
to ask every client that gets served to
complete the form and to place the
completed form in a sealed container.
Another possibility is to obtain tel-
ephonic feedback similar to the above
from clients that make purchases above
a certain limit or clients who give your
business value above a certain limit
whose contact information you have.
This is done so as to determine
your position in service delivery as per-
ceived by your clients and then assist in
launching relevant actions to address
areas of weakness.
There are two more ways of evalu-
ating client satisfaction namely:
• Complaints received in re-
spect of service delivery and
• Items returned due to defects
and substandard functioning.
If you implement a process of tracking
you will be able to identify trends and
areas with shortcomings.
Suggestions on how to keep clients
satisfied:
• Be friendly towards clients
• First impressions matter -
- Business premises must be
well kept
- The appearance and clothing
of staff must create a positive
image
- If in retail business, delivery
vehicles must be clean.
• Staff members must be adequately
trained to provide truly good ad-
vice and solutions to clients’ prob-
lems, questions and needs. Staff
members are the frontline people
responsible for satisfying clients.
In fact, to clients they are your or-
ganization. For that reason it is
not surprising that client’s satis-
faction suffers when staff mem-
bers are dissatisfied. When staff
members are satisfied, there is
less turnover, which means they
are more likely to possess experi-
ence that makes them better able
to satisfy clients. Also when cli-
ents deal with the same people
over time, they are more confident
that the organisation will consist-
ently meet or exceed their needs.
• Staff members must take responsi-
bility for helping clients “on behalf
of” the business as a whole. As
indicated above, training is impor-
tant and it is through training that
staff members should be made to
understand their role in service
provision so as to avoid such things
as for example:
- “This is not my depart-
ment……….”
- “I am new here…..” or
- “The system is down………..”?
• Promises to clients must be
kept
• There must be focus on the
details of the business
• There must be some reaction
to messages and clients must
be kept informed on the
progress made in respect of
enquiries and requests
Good communication must • be maintained between the
business and clients
Remember that a satisfied client is one
of the most powerful marketing aids at
the disposal of any business.
Theme:How to determine client satisfaction?
Lead through Service Excellence
LEAD THROUGH SERVICE EXCELLENCE
FCCA, ACACompiled by Leggy Bojosi
29