Purpose: Robotic process automation (RPA) promises significant benefits in the insurance claims handling process. There is, however, a lack of understanding and governance of the technical and operational governance challenges (hereinafter, challenges) associated with the efforts by information technology (IT) to deliver solutions that are aligned with the business requirements. These challenges often contribute to projects failing, that, in turn, has a significant financial impact on insurance providers. As insurance providers may lack the necessary technological and governance knowledge and experience to identify and understand these challenges, this study aimed to provide insight into these challenges associated with RPA in the insurance claims handling process. Design/methodology/approach: A structured literature review examined the insurance claims handling process, RPA, and IT governance. Furthermore, the management and governance objectives of the control objectives for information and related technologies (COBIT 2019) were applied, together with the existing literature, to identify the challenges comprehensively and in detail. Findings: Fourteen challenges, often leading to the failure of RPA projects in the insurance claims handling process, were identified and described in further detail. Research limitations/implications: The study drew on the prevailing literature in RPA and, therefore, any future developments in this field are not reflected in the findings. Furthermore, the study focused on identifying technical and operational challenges related to RPA in the insurance claims handling process, and does not include strategic and business-level challenges. Originality/value: Most current studies on IT governance challenges of RPA are conducted ad hoc, and the challenges identified are not comprehensive. In contrast, this study assumed a comprehensive approach, using a well-known IT governance framework-COBIT 2019-to ensure the completeness and rigour of the identified challenges. This approach addressed the need to thoroughly understand the challenges in RPA projects for insurance claims handling processes. Furthermore, the challenges identified in this study were not only theoretical. It is helpful to the management function within an organisation, that is responsible for successfully planning and implementing RPA in the insurance claims handling process, and for the internal and external assurance providers in the risk management process. By understanding these challenges, these functionaries and providers can be better prepared to handle the complexities of RPA implementation.
Purpose: If audit committees are tasked with the responsibility to exercise oversight over others, then who exercises oversight over audit committees? With this question in mind, the primary objective of this study was to hold to account the audit committees of metropolitan municipalities in South Africa, by determining whether it is compliant with the King IV report (King IV) audit committee disclosures, and to discuss the disclosures with a view to recommending future areas of research. Research approach: This study took the form of a literature review, and the study of empirical evidence obtained via a content analysis of the annual reports of metropolitan municipalities. Main findings: Metropolitan municipalities in South Africa are currently disclosing some information in its annual reports, in compliance with King IV audit committee disclosures. However, the disclosures vary in terms of nature and depth. This could imply a lack of common understanding amongst audit committees of metropolitan municipalities regarding aspects that should be disclosed in annual reports, pertaining to audit committees. Thus, external stakeholders of audit committees do not have access to the same information regarding audit committees, and this could affect the extent to which the external stakeholders can hold the audit committees to account. Ultimately, this finding could serve as evidence of agency and accountability problems in South African metropolitan municipalities. Limitations: This study only focused on metropolitan municipalities, and the findings may not be applicable to other types of entities. Value: This study provides an informed description of whether metropolitan municipalities comply with King IV audit committee disclosures, and expand the limited research related to King IV and metropolitan municipalities.
Research purpose: The research purpose of the study was to determine the effectiveness of the Beneish model as a fraud control measure for Zimbabwean state-owned enterprises (SOEs). Design/methodology/approach: This study adopted a triangulation research approach. Statistically tested, quantitative data from financial statements were validated with the qualitative data derived from Auditor General (AG) reports on Zimbabwean SOEs, and reported fraud issues from newspaper articles on Zimbabwean SOEs. Research findings: The findings revealed that the Beneish model is effective in detecting and preventing fraud, and can be used as an early indication of fraud in the financial statements of Zimbabwean SOEs. This can assist the AG, internal and external auditors, anti-corruption agencies, forensic accountants, and certified fraud examiners with early identification of possible fraud in the financial statements, and will reduce the fraud impact, since faster detection and prevention can potentially minimise financial losses. Policy implication: Fraud indicators (red flags) from the Beneish model can be used as an early indication of potential fraud in the financial statements of Zimbabwean SOEs. This helps the AG, external and internal auditors, anti-corruption agencies, forensic accountants, and certified fraud examiners to identify red flags in the financial statements, earlier. Curbing fraud losses can potentially improve the performance of Zimbabwean SOEs. Originality: Fraud control measures from the Beneish model's red flag fraud indicators are expected to add value in curbing the occurrence of fraud in Zimbabwean SOEs.
Purpose: This study aimed to identify how internal auditors in both public and private sectors can acquire the relevant fraud investigation knowledge and skills required to conduct fraud investigations-addressing the expectation gap between user expectations and the guidance provided by the IIA (Institute of Internal Auditors) global internal audit standards. Design/Methodology/Approach: An interpretivist research paradigm with a qualitative methodology, was employed. Data were collected through semi-structured interviews with 20 internal auditors from the IIA South Africa membership-database, representing both public and private sectors, selected via purposive sampling. Thematic analysis identified skill acquisition pathways. Findings: The research reported a substantial expectation gap, with limited IIA guidance on fraud investigation skills. Most internal auditors acquire these skills post-tertiary education, primarily through the certified fraud examiner (CFE) designation. Fraud investigation risks, resulting from of inadequate skills, include inadmissible evidence, and case dismissals, affecting both sectors and emphasising the need for effective skill acquisition methods. Research limitations/Implications: The study focused on foundational fraud investigation skills, excluding specialised areas, such as cyber fraud. Participant-subjectivity might have influenced responses. The findings suggested revising IIA standards, to support skill acquisition for internal auditors in both sectors. Originality/Value: This article follows from an unpublished Doctor of Philosophy study at the Nelson Mandela University. The study adds value by identifying practical methods for internal auditors in public and private sectors to acquire fraud investigation skills, proposing integration of fraud modules into academic curricula and the CFE certification. It enhances organisational accountability across sectors, by aligning auditor competencies with fraud investigation expectations.
Purpose: Various stakeholders now require sustainability disclosures, over and above traditional financial reporting. This research examined the sustainability reporting practices of a sample of public interest entities, in Namibia. The sustainability reporting guidance available in Namibia is the Corporate Governance Code for Namibia (NamCode), which recommends that organisations prepare an integrated report. Design/methodology/approach: This descriptive study aimed to assess the prevailing sustainability reporting practices of 14 Namibian public interest entities (PIEs). The study adopted a qualitative approach, and the source of information was interviews with those responsible for such reporting. Research limitations/implications: The study found that most of the sampled public interest entities consider sustainability issues within its organisation and report on these. Furthermore, these organisations use integrated or combined reports with financial and sustainability disclosures. The most common guidance for reporting was the NamCode. None of the organisations included in the study prepared a separate sustainability report or applied the Global Reporting Initiative (GRI) guidelines. The level of disclosure is still low, and therefore it appeared that there is room for improvement in the disclosure and reporting. Originality/value: This study offers valuable insight into considering sustainability matters and reporting by Namibian PIEs. In addition, it adds to the literature on sustainability reporting in Namibia and sub-Saharan countries, in general.
Purpose: This study examined whether reciprocal peer reviews for external quality assessments of internal audit functions (IAFs), performed within the same district or region, are perceived as free from bias and conflict of interest, given the close professional relationships amongst internal auditors in the same district. Municipalities in the Overberg District and municipalities in the Western Cape Province of South Africa, were used in this case study. Design/Methodology/Approach: A qualitative case study approach, grounded in agency and institutional theories, was employed. Semi-structured interviews were conducted with 14 participants, consisting of chief audit executives, municipal managers, and audit committee members, selected via purposive sampling. Findings: The findings revealed that reciprocal peer reviews undertaken within the same district are perceived as biased and influenced by conflicts of interest, ascribed to the close proximity and familiarity amongst municipalities and the internal auditors involved, as well as the assistance they provide to each other. These close working relations amongst these internal auditors thus compromise the objectivity of the external quality assessment process and outcomes, in fact or in appearance. Research limitations/implications: The study's scope was limited by the Provincial Treasury's decision to assign independent service providers to perform external quality assessments in some municipalities, reducing the number of reciprocal peer reviews conducted. Future research could explore alternative external quality assessment methods, across diverse municipal contexts. Originality/Value: This article draws upon research from an unpublished Master of Commerce dissertation. The research contributes to the limited literature on reciprocal peer reviews in South African local government, by highlighting challenges to its credibility and emphasising the need for enhanced Institute of Internal Auditors' (IIA) guidance, to ensure objectivity in external quality assessments, given the critical importance of objectivity in the internal auditing profession and the external quality assessment process, in fact and in appearance.
Purpose: The purpose of this research paper was to present a framework for the internal audit disclosures of Schedule 2 South African state-owned entities. Methodology: The researchers conducted a systematic literature review to determine the recommended internal audit disclosures. This was followed by a content analysis of the annual reports of state-owned entities, exploring whether it is currently releasing the recommended internal audit disclosures. A preliminary framework for internal audit disclosures was developed, and sent to public sector experts for validation. Furthermore, a comparative analysis of the three data collection methods was conducted via a points of triangulation analysis using a data transformation design, at which point qualitative text was transformed into quantitative text. Findings: This study found that, with regard to its internal audit functions, Schedule 2 state-owned entities should disclose information to the public describing its nature of work and activities, organisational status, internal audit structure, findings, competence, results of quality assurance-and improvement programmes, effectiveness of the internal audit function, internal audit approach, and the application of the international professional practice framework, and it should also publish its internal audit reports on its websites. Limitations: The systematic literature review was limited to Google Scholar and Scopus-indexed publications, and only single-year annual reports of Schedule 2 state-owned entities were analysed. Lastly, only the opinions of registered government auditors were sought. Value: This study adds to the body of knowledge, as no prevalent framework exists informing on items to be disclosed to the public by South African Schedule 2 state-owned entities, concerning its internal audit functions.
Purpose: This study aimed to develop a comprehensive framework for risk identification and mitigation pertaining to data security, privacy, and confidentiality when using medical internet of things (IoT) devices. Design/methodology/approach: A qualitative, non-empirical study was undertaken to identify data related risks and appropriate mitigating controls when using medical IoT devices, via a systematic literature review and two governance frameworks. Findings/results: Within the medical field, risks of using the IoT are concentrated around data security, privacy, and confidentiality throughout the data lifecycle, prevalent within each layer of the IoT architecture. A comprehensive framework was developed to identify these risks and appropriate mitigating controls at each layer within the architecture, in order to facilitate sound information technology (IT) and data governance, and promote end-to-end security throughout each architectural layer. Practical implications: This research documented evidence of the risks posed by IoT devices within the medical field, particularly pertaining to IoT data and mitigating controls, so as to adequately address these risks. It provides those charged with governance-including IT specialists and auditors-with a tool to identify key significant risks, and mitigating controls to reduce the risk, that is compliant with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and control objectives for information technologies (COBIT) 2019. Originality/value: This research provides a comprehensive framework that can be used by those in charge of governance, including IT specialists, for risk identification and mitigation during implementation, for sound IT and data governance of medical IoT devices-using recognised benchmarks-and can also be utilised by auditors when gaining an understanding of the internal control environment and assessing risk. The use of the benchmarks ensures that all significant risks are identified, compared to previous research that identified risks in an ad hoc manner.
Purpose: This study examined the pay-performance relationship of vice-chancellors at South African universities and the role of remuneration governance in bolstering the nexus. The study navigated key theoretical-, knowledge-and empirical gaps in the literature, particularly the dependence on data from developed countries, that may not directly apply to the developing nation context. It also highlighted the necessity of composite performance measures, in response to a South African Council for Higher Education call for research on the relationship between university executive compensation and performance. Design/methodology/approach: Secondary data from 19 South African universities were collected from annual reports and external databases for a six-year period, spanning 2016 to 2021. The total remuneration of vice-chancellors was used, and the performance variables comprised teaching efficiency, research efficiency, financial sustainability and university rankings. Data envelopment analysis was employed to establish teaching and research efficiency. Mechanistic content analysis was used to establish a remuneration governance practice index, and the random effect panel regression analysis was employed for data analysis. Findings: The results suggested that vice-chancellors' pay in South African universities appears to be linked to teaching efficiency and financial sustainability-both positively-as well as university rankings, although negatively. Findings further suggested that remuneration governance strengthens the impact of teaching and research efficiency on vice-chancellor remuneration, whilst weakening the influence of university rankings. Research limitations: The limitations of a small sample size is recognised, given the availability of data, as well as the absence of differentiation between short-term and long-term factors. Originality/value: The study findings underscored financial sustainability and, to a lesser extent, teaching efficiency as determinants of vice-chancellor pay, whereas the effects of university ranking and research efficiency are less clear. It highlighted the importance of a remuneration governance practice index in shaping the relationship between university composite performance metrics and vice-chancellor remuneration. This study introduced new empirical evidence, addressed the knowledge gap and contributed to practice and reforms in South African universities. Finally, it provided valuable insights for university councils' remuneration committees and the regulator.
Purpose: The study investigated the correlation between inherent internal control limitations and its resultant influences that undermine the effectiveness of internal control systems at a selected university of technology, in South Africa. Organisations rely on internal controls to prevent and mitigate risks. However, the effectiveness of these internal control systems is negatively affected by various inherent limitations. Design/Methodology/Approach: A quantitative approach was adopted, via a structured online questionnaire and a combination of descriptive- and correlation analysis, to survey 128 senior managers (53.3% participation rate). Findings: The results indicated that various inherent internal control limitations occur, as a result of influencing factors. The results further demonstrated strong positive and strong negative correlations between the inherent limitations and various items that influence its presence. Research limitations: The research population was limited to the senior managers of the selected university of technology in South Africa. Originality/Value: The study highlighted inherent limitations that presented a threat to the university's internal controls, demonstrating that inherent limitations occur on account of root causes, that could potentially be addressed.
Purpose: Data-overload is a generic, complicated issue, affecting data-analysis processes for many researchers. The challenge emanates from the researcher collecting volumes of data that hinder their ability to engage in higher-level data-analysis processes. Despite the existence of numerous frameworks towards understanding the world, novice qualitative researchers often become overwhelmed, disregard guidelines, and neglect to clearly explain their data-analysis processes. This paper discusses the author's experience with data- overload and how the three-phase coding process and collaborative decision-making with other stakeholders helped overcome challenges. The aim is to offer new accounting science researchers a set of examples, to serve as benchmarks when dealing with data-overload in their qualitative research projects. Methodology/Approach: The author employs narrative reflection, to capture the interpretive thematic data- analysis of in-depth interviews and document-based datasets derived from a completed dissertation. This paper's discussions are based on the key factors of data-overload and data-analysis concepts provided by the literature review. Charmaz's constructivist grounded theory principles and Creswell's spiral framework were used to present an open, axial and focused coding process, organising data around concepts, and forming categories and themes for theory development. Implications and Value: The three-phase coding method in qualitative data-analysis can effectively help navigate data-overload and provide reliable insights concerning the collected data. The developed frameworks can assist accounting science students and supervisors, as supplementary resources in addition to existing guidance, when they experience data-overload in their qualitative research projects.
Purpose: The Auditor-General South Africa ( AGSA) identified metropolitan municipalities as the highest contributors to unauthorised, irregular, fruitless and wasteful (UIFW) expenditure in South Africa, prompting the National Treasury (NT) to call for the management there-of, as a top priority. This study aimed to assess the drivers behind UIFW expenditure's ongoing presence in the City of Tshwane Metropolitan Municipality (CoT), despite the AGSA's findings and recommendations, with an extensive oversight role by municipal public account committees (MPAC). Methodology/Approach: Through qualitative research techniques, the researchers thematically analysed the collected data, using the Committee of Sponsoring Organisations of the Treadway Commission (COSO) framework. The analysis of UIFW expenditure trends in metropolitan municipalities over five years, revealed significant problems in the Tshwane metropolitan municipality, leading to the study of the CoT. By employing Atlas.ti software, the coding process identified the primary factors responsible for the prevalence of UIFW expenditure in the CoT. Findings/Results: Using eight codes, the study illustrated the primary themes that contribute to irregular spending and the challenges that obstruct internal controls. The research findings attributed the weaknesses the internal control environment to cultural and behavioural factors as the main driving forces towards incurring the UIFW expenditure, whilst identifying management practices as significant contributors to the lack oversight. According to the study, the lack of awareness and failure to adhere to established procedures detrimentally impacted the effectiveness of control measures, resulting in the occurrence of UIFW expenditure. Owing to the absence of effective measures to manage and discourage misconduct, the metropolitan municipality had inadvertently provided individuals with opportunities to embezzle funds, leading to a surge unethical practices. To effectively address these challenges, the study outcomes recommended a range measures, including enhancing the control environment, increasing accountability, and establishing consequence management system. The aim of this initiative was to address loopholes that facilitate unwarranted activities and to encourage responsible financial management by the metropolitan municipality, ultimately reducing UIFW expenditure. Heuristic inferences: The study highlighted that a lack of effective management oversight at an operational level had led to a failure to understand and follow internal controls. Although the AGSA managed to achieve some progress in suggesting measures to address the problem, the underlying causes of the issue remained unknown. Discovering these causes would be instrumental in mitigating UIFW expenditure in the metropolitan municipality. The root causes of these issues can be traced back to the way management operates, the CoT's capacity constraints, and the prevailing culture. In order to tackle this issue, the metropolitan municipality culture should prioritise adherence to and promote awareness of internal controls. Originality/Value: This study identified the factors behind the persistent incurrence of UIFW expenditure in the CoT, suggesting the need for more research in other municipalities.
Purpose: The study investigated the alignment of executive directors' remuneration with firm performance, as required by King IV, Principle 14, that emphasises fair and responsible remuneration of executives, to support the achievement of strategic objectives. The study aimed to determine whether executive remuneration is fair and reasonable by examining its relationship with firm performance and its effectiveness in motivating executives to enhance firm performance. Design/Methodology/Approach: The study employed Granger causality tests and panel regression analyses, to explore the causal relationships between executive directors' remuneration and both market-based and accounting-based performance metrics. Findings: The findings revealed a bidirectional causal relationship between executive directors' remuneration and market-based performance metrics, and a unidirectional causal relationship between executive remuneration and accounting-based performance metrics. These results provided insights into the performance management philosophy of JSE-listed firms. Research Limitations/Implications: The study findings are important towards informing strategy and policy advancement. However, the study was limited by its focus on an emerging market setting of JSE-listed firms, limiting the generalisability of findings to other contexts, such as advanced markets. Originality/Value: This study was the first to focus on the causal inferences in the context of JSE-listed firms. The study contributes to the literature on executive remuneration by providing empirical evidence of the causal relationships between remuneration and firm performance. It underscores the importance of aligning executive remuneration with firm performance, to meet the standards set by King IV, and offers practical insights for stakeholders involved in governance and compensation practices.
Purpose: This study aimed to explore how auditors' applications of the International Standard on Auditing (ISA) 701 (communicating key audit matters) in independent auditor's report-principles link with corporate governance practices in state-owned enterprises, in South Africa. This was expected to provide insights regarding public sector auditors' views regarding ISA 701-links to the influencing of governance practices in state-owned enterprises. Methodology: The study followed a qualitative approach, relying on interviews with senior external auditors and senior technical managers, who have a working knowledge of auditing state-owned enterprises in South Africa. Findings: The study found that public sector auditors communicate certain matters to encourage effective oversight by those charged with promoting good governance. These matters include communication and emphasising matters that significantly impact financing decisions, as well as significant weaknesses in key financial controls. Implications: The benefits of drawing management's attention to issues that could improve corporate governance, are significant. Regulatory authorities might consider extending the reporting of key audit matters to all state-owned enterprises, not just those that are publicly listed. Additionally, the insights provided by auditors can be leveraged by regulatory authorities to strengthen corporate governance within state-owned enterprises. Originality/Value: The study contributes to understanding the value of adopting international auditing standards to the broader corporate governance ecosystem, using evidence from the public sector within an emerging economy.
Purpose: Given South Africa's expanding salary inequality, combined with excessive risk-taking by bank executives, this study investigated whether banks' chief executive officer (CEO) remuneration is justified, by the performance of the banking institution. Design/Methodology/Approach: This study used panel data analysis to determine if there is a long-term relation between CEO remuneration and company performance, in the South African banking sector. Research limitations/Implications: The detailed analysis, spanning 2009-2021 considered market- and accounting performance, to measure company performance. Agency theory and optimal contract theory were used to consider the historical and current tendency in CEO remuneration, including King IV and its "say-on- pay" provision. Findings: This study found a long-term relation between CEO total remuneration and company performance in the South African banking sector, but not between CEO short-term and long-term remuneration and company performance. Originality/Value: The result of this study offers a better understanding of the relationship between CEO remuneration and company performance in the South African banking sector.
Purpose: The audit committee is a governance mechanism used to combat financial statement manipulation. Prior evidence of its effectiveness, however, varies. Institutional theory suggests that audit committees fulfil a ceremonial role, as top management's tone inhibits the committee's effectiveness. This study, therefore, examined how the tone at the top moderates the association between audit committee effectiveness and financial statement manipulation. Design/Methodology/Approach: Logit and panel regression were used to analyse 196 Johannesburg Stock Exchange-listed companies, from 2011 to 2018. Financial statement manipulation was measured using fraud and discretionary accruals, whilst principal component analysis was used to develop five audit committee components and two tone components. Findings: An active audit committee was associated with less manipulation, whereas greater governance expertise and independence were associated with more manipulation. Although the tone components showed no independent association with manipulation, a certain, pessimistic tone inhibited the committee's diversity and activity, nevertheless enhancing financial expertise and independence. Conversely, a realistic, diverse tone enhanced the committee's activity and diversity, however, inhibiting financial expertise. Research Limitations/Implications: Understanding the moderating role of tone at the top is crucial to stakeholders, in determining whether an audit committee can effectively execute its mandate. This study's findings imply that stakeholders cannot simply rely on compliance with governance codes to ensure an effective committee, they must also consider the tone at the top, so as to determine the committee's effectiveness. Originality: This study is the first to show how audit committees are either empowered or overpowered by tone at the top, in South Africa.
Purpose: This study examined the impact of discontinuing share option compensation for non-executive directors (NEDs) on chief executive officer (CEO) monitoring. Design/Methodology/Approach: The difference-in-difference regression analysis was the main methodology used. To address the endogeneity problem, the study exploited a natural experiment presented by King III's recommendation to cease the use of share option compensation for NEDs in South Africa. Findings: This study demonstrated that eliminating share option compensation for NEDs does not weaken the effectiveness of their monitoring-it either enhances monitoring or has no discernible effect. The findings suggested that employing share option compensation for NEDs is not advantageous for shareholders, as it incurs costs by diluting the shareholding structure, whilst its removal does not compromise monitoring effectiveness. Research implications: This study validated the King III-recommendation to eliminate share options from NED compensation packages, providing valuable insights for future governance decisions in this domain. The results are beneficial to shareholders who play a pivotal role in voting on remuneration policies, including the various forms of incentives for NEDs. Originality/Value: The study makes three contributions: It showed that the use of share options for NEDs does not mitigate agency problems related to earnings manipulation and CEO remuneration. It enriches the literature on board monitoring, particularly for NEDs, by focusing on the unique, and previously overlooked, South African context. Lastly, it employed a natural experiment to effectively address the endogeneity problem, that was insufficiently addressed by previous studies.
Purpose: Audit quality is the pivot around which the audit profession resolves. Audit quality is only achievable when audit firms boast a quality-oriented culture, reflected in its audit quality climate. This study aimed to investigate whether the organisational climate in audit firms is quality-oriented. Design/Methodology/Approach: The study followed a quantitative research methodology to explore the organisational climate dimensions that non-executive employees (from first-year trainee auditors to senior audit managers), working in major audit firms in South Africa and for the Auditor-General of South Africa (AGSA), consider indicative of audit quality. The study used Patterson's Organisational Climate Measure (OCM) as a departure point to develop the study's questionnaire. Findings: The findings showed that Patterson's organisational climate dimensions are not all relevant to an audit quality climate in audit firms, and that additional dimensions come into play. Also, statistically significant differences were found between the perceptions of non-executive employees at a Big 4 audit firm, and those of second-tier audit firms and the AGSA, concerning their firm's quality orientation. Research Limitations/Implications: This study was limited to the South African context and the results cannot be generalised to the international context. Originality/Value: This study illuminated the organisational culture and -climate in audit firms. It provides insight into the under-researched view of audit employees in the audit quality debate. Such insight can assist audit firm leadership to better manage and promote a quality-orientation amongst employees.
Purpose: This study discovered the most disclosed key audit matters (KAMs) in the audit reports of South African state-owned enterprises (SOEs), and investigated the relationship between the audit committee, as a corporate governance mechanism, and the auditors' disclosure of KAMs. The corporate governance mechanisms considered, included the composition, expertise, independence, and number of meetings of the audit committee, as well as the type of opinion issued, the auditor, and the financial expertise of the Chief Financial Officer (CFO). Methodology: The study followed a quantitative approach, using content analysis. Detailed content analysis was performed on the audit reports of the 21 major SOEs listed in schedule 2 of the Public Finance Management Act (PFMA) for the period 2017 to 2020. Descriptive analysis and a binomial logistic regression were used to analyse the data. Findings: The results indicated that the most disclosed KAMs relate to the measurement and the impairment of financial instruments, given the higher judgement and estimation required. The regression analysis indicated that the number of independent members per audit committee, the number of audit committee members with financial qualifications, the financial expertise of the CFO, the type of opinion, the number of meetings and the complexity of the SOE, impact the KAMs reported. Implications: The limitations of this study included the small sample size-comprising only SOEs listed in schedule 2 of the PFMA-and the qualitative data collection and -analysis, that can be subjective. Originality/Value: This study was the first to analyse the number of KAMs and corporate governance mechanisms at a public sector level, in South Africa. The research responded to the call for studies on the potentially positive impact of corporate governance on corporate reporting in the public sector, specifically in emerging economies.
Purpose: The purpose of this research was to develop a corporate risk management (CRM) model that could be used as a way of improving sustainability reporting (SR) and corporate governance (CG) in companies. The CRM model designed, needed to assist in communicating both financial and non-financial risks to companies, from a risk management perspective. By showing how CRM, SR, and CG relate in companies, the research assessed the function of CRM in SR and CG. Design/Methodology/Approach: Following a desktop study, using document analysis technique, an integrated CRM model was developed, that considers different forms of risk. Findings: The model demonstrated how CRM, SR, CG, and compliance committees can link up to promote CRM-based company reports in companies, through risk compliance and analytic metrics. CRM may enhance strategy formulation and implementation, company reputation, and value creation. Applying CRM in a company's sustainability- and financial reporting improves CG and understanding of the risk universe. Originality/Value: The model promotes compliance by fostering risk-informed decision-making, specific financial standards, and distinct operational- and strategic goals. It also assists in managing stakeholders' perceptions and participation, as well as the corporate image. It further demonstrates how CRM drives the decision-making process in SR and CG.
