Doctoral Degrees (School of Accountancy)

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Browsing Doctoral Degrees (School of Accountancy) by Subject "Annual Report disclosure"

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    Corporate governance in South African higher education institutions
    (University of the Free State, 2017) Crous, Cornelie; Lubbe, D. S.
    𝑬𝒏𝒈𝒍𝒊𝒔𝒉 Several Universities in South Africa, namely the Tshwane University of Technology (TUT), the Walter Sisulu University (WSU), the Central University of Technology (CUT) and Vaal University of Technology (VUT), were placed under administration since 2011 because of poor administration and governance. Examples of the poor administration and governance practices include, among others, the appointment of Vice-Chancellors with questionable qualifications, the payment of exorbitant remuneration to Vice-Chancellors, malfunctioning of the Councils and accusations and rumours of corruption in the National Student Financial Aid Scheme (NSFAS). The continued national student protests in 2015 and 2016 calling for free and quality higher education have placed renewed focus on the problems experienced by Universities. The soundness of the application of corporate governance principles at Universities, therefore, needed to be investigated. Because of this need, the application of corporate governance principles at South African Universities was addressed in this study. The Regulations for Reporting by Public Higher Education Institutions of 2014 require Universities to disclose their application of the King III principles in their Annual Reports. Although these disclosure requirements provide detail disclosure guidance, no international best practices were included. No tool, instrument or framework could be found to test the Universities’ compliance with the Reporting Regulations and King III principles, which further necessitated this study. By using a qualitative research design, this study used a literature review to develop a framework. The framework was based on the guidance in the Reporting Regulations (which contains the principles of the King III Report), international best practices, and the King IV Report. The framework could be used to determine the level of compliance of disclosures found in the South African Universities’ Annual Reports. Although the implementation date of the King IV Report is 1 April 2017, some Universities were proactive in the application of the principles contained in the King IV Report. The developed framework, therefore, includes additional disclosures, contained in the King IV Report, that were excluded from the Reporting Regulations, as a proactive measure in assessing the disclosure of King IV principles in the Annual Reports of the South African Universities. This framework was used in the empirical portion of the study to analyse the Annual Reports of the South African Universities for the 2011 to 2015 financial years. A total of 113 Annual Reports were analysed against the framework. The framework included 536 items based on the Reporting Regulations of South Africa; 140 items related to the changes from King III principles, as contained in the Reporting Regulations, to the King IV Report; and sixty items based on international best practices. Findings of the study suggest that some Universities in South Africa are proactive in the implementation of the King IV Report, although the implementation date of this report is only 1 April 2017. The disclosures of the South African Universities’ application and compliance with corporate governance principles, according to both South African and international best practice, are lacking in detail. The absence of detail disclosures leads to the concerns about the disclosure practices at these Universities as well as the Universities’ commitment to transparency and accountability. The problems experienced in obtaining the Annual Reports of the Universities raise additional concerns in terms of the Universities’ commitment to transparency and accountability. These problems raise concerns as the Universities are largely funded by state subsidies, which make the Annual Reports of each University information that should be publicly available. The results of the application of the framework clearly indicate that South African Universities need to address the quality of the information contained in their Annual Reports. The Council and Committee members need to be better informed of what their duties and functions are in terms of the disclosures in the Annual Reports. Universities should also ensure that the individual, or group of individuals responsible for compiling the Annual Reports is fully aware of the details that should be included in the Annual Reports. The framework developed in this study can be used by the Department of Higher Education and Training, external auditors of the Universities as well as the Universities themselves, to determine the level of compliance with the disclosure recommendations for Annual Reports. It may further be used as a rating system to rate the South African Universities with regards to the application and disclosure of application of corporate governance principles, or as a warning system to indicate shortages in the corporate governance practices of Universities. ___________________________________________________________________