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Faculty of Accounting and Informatics

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    Use of management accounting practices and factors affecting its use : a survey of small and medium-sized enterprises in Durban
    (AOSIS, 2022-03) Cele, Sicelo; Nyide, Celani J.; Stainbank, Lesley J.
    The sustainability of small and medium-sized enterprises (SMEs) in South Africa is important, mainly because of their contribution to the gross domestic product (GDP) and their creation of work opportunities. The high rate of SME failure in South Africa is largely attributable to the lack of management skills by their owners and managers.Research purpose: The objective of the study was to examine owners and managers of Durban SMEs’ perceptions of the use of management accounting practices (MAPs) and the factors affecting its use. In addition, the challenges faced by SMEs were also investigated.Motivation for the study: Although the use of MAPs has been investigated in other parts of South Africa, research on Durban SMEs’ use of MAPs and factors affecting its use is lacking in KwaZulu-Natal, which is an important contributor to South Africa’s GDP. If MAPs are not being used, what strategies could be recommended to advance their use? This important question provided further motivation for this study.Research approach/design and method: The research adopted a quantitative approach in the form of a self-administered questionnaire, which was e-mailed to SMEs.Main findings: Management accounting practices were perceived to be used mainly in assisting planning and in assessing business performance. Factors affecting the use of MAPs were the lack of management accounting knowledge and education and skills. Challenges faced by SMEs were identified as being mainly financial and human resource challenges. Small and medium-sized enterprise owners and managers supported the recommendation that they should go for management accounting training.Practical/managerial implications: The study recommended that SMEs’ owners and managers should attend management accounting training. Bodies such as government agencies or educational institutions should ensure that training aimed at SMEs is offered.Contribution/value-add: The study provides new information about the perceptions of owners and managers of SMEs on the use of MAPs, factors affecting its use of MAPs and other challenges. It further provides impetus for the need to provide management accounting training aimed at SMEs.
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    Determinants of insurance penetration in West African countries : a panel auto regressive distributed lag approach
    (MDPI AG, 2021-08) Olarewaju, Odunayo; Msomi, Thabiso
    This study analyses the long- and short-term dynamics of the determinants of insurance penetration for the period 1999Q1 to 2019Q4 in 15 West African countries. The panel auto regressive distributed lag model was used on the quarterly data gathered. A cointegrating and short-run momentous connection was discovered between insurance penetration along with the independent variables, which were education, productivity, dependency, inflation and income. The error correction term’s significance and negative sign demonstrate that all variables are heading towards long-run equilibrium at a moderate speed of 56.4%. This further affirms that education, productivity, dependency, inflation and income determine insurance penetration in West Africa in the long run. In addition, the short-run causality revealed that all the pairs of regressors could jointly cause insurance penetration. The findings of this study recommend that the economy-wide policies by the government and the regulators of insurance markets in these economies should be informed by these significant factors. The restructuring of the education sector to ensure finance-related modules cut across every faculty in the higher education sector is also recommended. Furthermore, Bancassurance is also recommended to boost the easy penetration of the insurance sector using the relationship with the banking sector as a pathway.
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    Environmental, social and governance and financial performance nexus in South African listed firms
    (AOSIS, 2024-01-01) Matemane, Reon; Msomi, Thabiso Sthembiso; Ngundu, Marvellous
    Background: Environmental, social and governance (ESG) factors have become topical in recent years because of climate change existential threat to humanity. There is, however, a limited understanding of how the firm’s ESG efforts affect firm outcomes. Aim: The aim of this study was to investigate the relationship between firm’s ESG indicators and the financial performance. Setting: The sample is drawn from Johannesburg Stock Exchange (JSE) listed companies based on data availability. South Africa is not only plagued by social ills and governance failures, but it is also one of the world’s largest emitters of greenhouse gases, making it an ideal laboratory for studying the ESG and firm performance nexus. Method: We utilized a dataset spanning the years 2012–2022, covering 67 JSE-listed firms. These panel data were analyzed using the two-step system generalised method of moments (GMM). Results: We found that the disaggregated ESG indexes have a positive, albeit insignificant impact on the financial performance. These findings hold even when financial and non-financial firms are examined separately. Conclusion: Policymakers, including standard setters and regulators, should encourage firms to be sincere on ESG efforts and avoid greenwashing. Contribution: The study employs a relatively robust estimation technique (two-step system GMM) over a relatively long period (2012–2012). Furthermore, the sectoral analysis of financial and non-financial firms adds to the body of literature and policy development.