Doctoral Degrees (School of Accountancy)
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Browsing Doctoral Degrees (School of Accountancy) by Subject "Financial statements of sectional title schemes"
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Item Open Access The sectional title industry in South Africa: enhancing accounting and auditing practices(University of the Free State, 2017) Steenkamp, Leandi; Lubbe, D.S.𝑬𝒏𝒈𝒍𝒊𝒔𝒉 South Africa has a long and complex history of land and housing problems, and from the late 1800s the South African government administrations spent considerable time and energy on adopting and implementing numerous pieces of land-related legislation in order to address these problems. Sectional title property plays a vital role in addressing this high-priority problem, and can assist in providing much needed residential accommodation for households of all income levels, within commuting distance of employment centres. Close to one million households in South Africa reside in sectional title property schemes. The new so-called third generation sectional title legislation became effective in the second half of 2016. The amendments effected by the new legislation not only remove a substantial number of obsolete provisions, extend consumer protection, and propose to eliminate various problems, but also bring about a number of entirely new requirements, such as the establishment and maintaining of reserve funds. Many of these new legislative changes will have far-reaching implications for the governance, budgeting and financial management of sectional title schemes. Also, many legislative aspects relating to governance, accounting and auditing of sectional title schemes remain contradictory and confusing. Role players in the South African sectional title industry face a number of unique challenges. In the problem statement of this study it is argued that governance-, accounting- and auditing related research on the sectional title industry is relevant, topical and imperative if current governance, accounting and auditing practises is to be enhanced. Following this argument, this thesis aimed to give in-depth overviews of three aspects; firstly, an in-depth overview of risks associated with sectional title for various stakeholders (i.e. owners, trustees, managing agents, auditors and accountants and EAAB-appointed inspectors) from an accounting, governance and auditing perspective; secondly, an in-depth overview of auditing- and governance-specific problems relating to sectional title; and thirdly an in-depth overview of accounting-specific problems relating to sectional title. More specifically, the research objectives were threefold; firstly, to find possible solutions to the above-mentioned problems and to make recommendations in this regard; secondly, to set benchmarks from the analysis of the annual financial statements of respondents over a three-year period that can be of assistance as an industry standard for owners, trustees, managing agents, auditors and accountants rendering a professional service, and so enhance accounting and auditing practices; and thirdly, to identify future research opportunities that falls outside the scope of the study. The literature review of this study covered various legislative aspects relating to the functioning of bodies corporate, boards of trustees, trustee chairpersons, managing agents, sectional title governance, and accounting and auditing of bodies corporate. The literature review paved the way for a detailed analysis of the governance, auditing and accounting aspects relating to a sample of body corporate financial statements. An empirical study was also performed on the sectional title industry in South Africa by way of interviewing a sample of role players in the industry, namely body corporate trustee chairpersons, managing agents of bodies corporate, sectional title accounting and auditing practitioners and EAAB-appointed inspectors. The results of the empirical study and data analysis revealed a great number of risks, practical problems, contradictory and confusing legal aspects as well as uncertainties in the industry. Various solutions to the identified problems and concerns were suggested and practical recommendations were made of which the industry should take note. The empirical findings can also be used as a valuable basis for further research. ___________________________________________________________________