Die oogmerk van hierdie studie is om die waarde van 'n klein maatskappy-oudit te bepaal en om daarvolgens 'n geskikte hervormingstrategie vir sodanige audits te bepaal. 'n Literatuurstudie is uitgevoer met betrekking tot die ontwikkeling en aard van klein maatskappy-oudits, die toepaslikheid van Suid-Afrikaanse ouditstandaarde op klein maatskappy-oudits en die verwagtings van die gebruikers van 'n klein maatskappy se finansiele state. Die voormelde aspekte is daarna empiries getoets ten einde 'n algemeen aanvaarde hervormingstrategie vir klein maatskappy-oudits te formuleer. Uit die literatuurstudie is verskeie kenmerke van 'n klein maatskappy ge"identifiseer. Daarvolgens is argumente aangevoer wat die waarde van 'n klein maatskappy-oudit bevraagteken, soos dat belanghebbendes nie die geouditeerde finansiele state vir besluitnemingsdoeleindes aanwend nie, en dat die tradisionele behoefte aan ouditering nie by klein maatskappye bestaan nie, omdat die aandeelhouers en bestuur (direkteure) gewoonlik dieselfde persona is. Die empiriese navorsing onder die vernaamste gebruikers van klein maatskappye se finansiele state, naamlik sodanige maatskappye se aandeelhouers en/of direkteure, die Suid-Afrikaanse lnkomstediens, bankinstellings en praktiserende ouditeure, het aan die lig gebring dat daar nie eenstemmigheid ocr 'n objektiewe definisie van 'n klein maatskappy bestaan nie. Die oorheersende kenmerk van 'n klein maatskappy is dat die eienaarskap van so 'n maatskappy in die bestuur (direkteure) gesetel is. As 'n algemene norm kan 'n maatskappy egter as klein geklassifiseer word indien dit nie twee van die volgende maatstawwe oorskry nie: Omset R12 miljoen; totale bates R6 miljoen; vyftig werknemers. Die empiriese ondersoek het verder getoon dat die primere gebruikers van klein maatskappye se finansiele state 'n positiewe houding oor so 'n maatskappy-oudit huldig en dat geouditeerde finansiele state van klein maatskappye wei gebruik word tydens bedrywighede en/of vir besluitnemingsdoeleindes en dat Suid-Afrikaanse ouditstandaarde redelik gepas is in 'n klein maatskappy-ouditomgewing. Die huidige openbaarmaking- en dokumentasievereistes van toepassing op aile maatskappye, word egter as te omvangryk beskou. Die slotsom van die studie is dat 'n klein maatskappy-oudit wei 'n bestaansreg geniet omdat dit waarde toevoeg. Gevolglik behoort die konvensionele statutere audit behou te word; die algemeen aanvaarde rekeningkundige-vereistes behoort egter vir klein maatskappye afgeskaal word. / The purpose of this study was to determine the value of a small company audit and then to establish a suitable reform strategy for such audits. A literature study was performed of the development and nature of small company audits, the applicability of South African auditing standards to small company audits and the expectations of the users of the financial statements of a small company. These aspects were then empirically tested to formulate a generally accepted reform strategy for small company audits. The literature study distinguished various characteristics of a small company. Arguments were raised which questioned the value of small company audits, for instance that the interested parties did not use the audited financial statements for decision-making and that the traditional need of auditing does not exist with small companies as the shareholders and management (directors) usually are the same people. The empirical research among the main users of the financial statements of small companies, namely its shareholders and/or directors, the South African Revenue Services, financial institutions and practising auditors revealed that there is no acceptable objective definition of a small company. The dominant characteristic of a small company is that the ownership of such a company vests in management. A company can, as a general norm, be classified as small if it does not exceed two of the following three measures: Turnover R12 million; total assets R6 million; fifty employees. The empirical investigation also showed that the primary users of the financial statements of small companies have a positive attitude towards a small company audit, that the audited financial statements of small companies are used in the performance of their activities and/or decision-making and that South African auditing standards are reasonably applicable to a small company audit environment. The current disclosure and documentation requirements applicable to all companies are, however, regarded as too comprehensive. This study led to the conclusion that a small company audit is justified because it adds value. The conventional statutory audit should therefore be retained but the generally accepted accounting requirements should be scaled down for small companies. / Auditing / D. Compt. (Toegepaste Rekenmeesterskap)

Die oogmerk van hierdie studie is om die waarde van 'n klein maatskappy-oudit te bepaal en om daarvolgens 'n geskikte hervormingstrategie vir sodanige audits te bepaal. 'n Literatuurstudie is uitgevoer met betrekking tot die ontwikkeling en aard van klein maatskappy-oudits, die toepaslikheid van Suid-Afrikaanse ouditstandaarde op klein maatskappy-oudits en die verwagtings van die gebruikers van 'n klein maatskappy se finansiele state. Die voormelde aspekte is daarna empiries getoets ten einde 'n algemeen aanvaarde hervormingstrategie vir klein maatskappy-oudits te formuleer. Uit die literatuurstudie is verskeie kenmerke van 'n klein maatskappy ge"identifiseer. Daarvolgens is argumente aangevoer wat die waarde van 'n klein maatskappy-oudit bevraagteken, soos dat belanghebbendes nie die geouditeerde finansiele state vir besluitnemingsdoeleindes aanwend nie, en dat die tradisionele behoefte aan ouditering nie by klein maatskappye bestaan nie, omdat die aandeelhouers en bestuur (direkteure) gewoonlik dieselfde persona is. Die empiriese navorsing onder die vernaamste gebruikers van klein maatskappye se finansiele state, naamlik sodanige maatskappye se aandeelhouers en/of direkteure, die Suid-Afrikaanse lnkomstediens, bankinstellings en praktiserende ouditeure, het aan die lig gebring dat daar nie eenstemmigheid ocr 'n objektiewe definisie van 'n klein maatskappy bestaan nie. Die oorheersende kenmerk van 'n klein maatskappy is dat die eienaarskap van so 'n maatskappy in die bestuur (direkteure) gesetel is. As 'n algemene norm kan 'n maatskappy egter as klein geklassifiseer word indien dit nie twee van die volgende maatstawwe oorskry nie: Omset R12 miljoen; totale bates R6 miljoen; vyftig werknemers. Die empiriese ondersoek het verder getoon dat die primere gebruikers van klein maatskappye se finansiele state 'n positiewe houding oor so 'n maatskappy-oudit huldig en dat geouditeerde finansiele state van klein maatskappye wei gebruik word tydens bedrywighede en/of vir besluitnemingsdoeleindes en dat Suid-Afrikaanse ouditstandaarde redelik gepas is in 'n klein maatskappy-ouditomgewing. Die huidige openbaarmaking- en dokumentasievereistes van toepassing op aile maatskappye, word egter as te omvangryk beskou. Die slotsom van die studie is dat 'n klein maatskappy-oudit wei 'n bestaansreg geniet omdat dit waarde toevoeg. Gevolglik behoort die konvensionele statutere audit behou te word; die algemeen aanvaarde rekeningkundige-vereistes behoort egter vir klein maatskappye afgeskaal word. / The purpose of this study was to determine the value of a small company audit and then to establish a suitable reform strategy for such audits. A literature study was performed of the development and nature of small company audits, the applicability of South African auditing standards to small company audits and the expectations of the users of the financial statements of a small company. These aspects were then empirically tested to formulate a generally accepted reform strategy for small company audits. The literature study distinguished various characteristics of a small company. Arguments were raised which questioned the value of small company audits, for instance that the interested parties did not use the audited financial statements for decision-making and that the traditional need of auditing does not exist with small companies as the shareholders and management (directors) usually are the same people. The empirical research among the main users of the financial statements of small companies, namely its shareholders and/or directors, the South African Revenue Services, financial institutions and practising auditors revealed that there is no acceptable objective definition of a small company. The dominant characteristic of a small company is that the ownership of such a company vests in management. A company can, as a general norm, be classified as small if it does not exceed two of the following three measures: Turnover R12 million; total assets R6 million; fifty employees. The empirical investigation also showed that the primary users of the financial statements of small companies have a positive attitude towards a small company audit, that the audited financial statements of small companies are used in the performance of their activities and/or decision-making and that South African auditing standards are reasonably applicable to a small company audit environment. The current disclosure and documentation requirements applicable to all companies are, however, regarded as too comprehensive. This study led to the conclusion that a small company audit is justified because it adds value. The conventional statutory audit should therefore be retained but the generally accepted accounting requirements should be scaled down for small companies. / Auditing / D. Compt. (Toegepaste Rekenmeesterskap)

Text in Afrikaans / Professionele etiek word nie altyd in ag geneem met besigheidsbesluite nie. Die vordering van kredietversekeringspremies is waarskynlik 'n voorbeeld daarvan. Die uitneem van kredietversekering is dikwels 'n voorwaarde vir die verlening van krediet deur sommige meubelhandelaars. Geweldige finansiele voordele wat voortspruit uit kredietversekeringskemas lei tot uitbuiting van die publiek deur sekere meubelhandelaars. Die verskillende kredietversekeringskemas wat in die meubelhandel toegepas word, voldoen nie aan die vereistes van die Woekerwet, 1968, en die Versekeringswet, 1943, nie. Hierdie oortredings het dikwels 'n wesenlike uitwerking op die geopenbaarde finansiele inligting van verskeie meubelhandelaars. Dit is die ouditeur se verantwoordelikheid om die statutere vereistes met die vordering van kredietversekeringspremies in ag te neem, aangesien dit 'n onwettige optrede, asook 'n onreelmatigheid kragtens algemeen aanvaarde ouditstandaarde is. Die ouditeur behoort toepaslik verslag te doen oor gevolglike wanvoorstellings van die finansiele inligting van die betrokke meubelhandelaars. Hierdie verantwoordelikheid word egter nie deur alle ouditeure nagekom nie. / The taking out of credit insurance is often a condition for the granting of credit by certain furniture traders. Enormous financial gains arising from credit insurance schemes result in exploitation of the public by certain furniture traders. Various credit insurance schemes in the furniture trade contravene the Usury Act, 1968, and the Insurance Act, 1943. These contraventions often materially affect financial information disclosed by certain furniture traders. It is the auditor's responsibility to consider the statutory requirements for the collection of credit insurance premiums, as this is an illegal act and an irregularity in terms of general accepted auditing standards. The auditor's duty is to appropriately report on resulting misrepresentations of financial information of such furniture traders. Some auditors however, do not comply with this responsibility. / Auditing / M. Compt. (Auditing)

Text in Afrikaans / Professionele etiek word nie altyd in ag geneem met besigheidsbesluite nie. Die vordering van kredietversekeringspremies is waarskynlik 'n voorbeeld daarvan. Die uitneem van kredietversekering is dikwels 'n voorwaarde vir die verlening van krediet deur sommige meubelhandelaars. Geweldige finansiele voordele wat voortspruit uit kredietversekeringskemas lei tot uitbuiting van die publiek deur sekere meubelhandelaars. Die verskillende kredietversekeringskemas wat in die meubelhandel toegepas word, voldoen nie aan die vereistes van die Woekerwet, 1968, en die Versekeringswet, 1943, nie. Hierdie oortredings het dikwels 'n wesenlike uitwerking op die geopenbaarde finansiele inligting van verskeie meubelhandelaars. Dit is die ouditeur se verantwoordelikheid om die statutere vereistes met die vordering van kredietversekeringspremies in ag te neem, aangesien dit 'n onwettige optrede, asook 'n onreelmatigheid kragtens algemeen aanvaarde ouditstandaarde is. Die ouditeur behoort toepaslik verslag te doen oor gevolglike wanvoorstellings van die finansiele inligting van die betrokke meubelhandelaars. Hierdie verantwoordelikheid word egter nie deur alle ouditeure nagekom nie. / The taking out of credit insurance is often a condition for the granting of credit by certain furniture traders. Enormous financial gains arising from credit insurance schemes result in exploitation of the public by certain furniture traders. Various credit insurance schemes in the furniture trade contravene the Usury Act, 1968, and the Insurance Act, 1943. These contraventions often materially affect financial information disclosed by certain furniture traders. It is the auditor's responsibility to consider the statutory requirements for the collection of credit insurance premiums, as this is an illegal act and an irregularity in terms of general accepted auditing standards. The auditor's duty is to appropriately report on resulting misrepresentations of financial information of such furniture traders. Some auditors however, do not comply with this responsibility. / Auditing / M. Compt. (Auditing)

Text in English / This study explores the phenomenon of auditor switching. The purpose of this study is to further contribute to the auditor switching literature by examining the reasons client companies in South Africa switch auditors, where the topic has not previously been studied and following a period of rapid and significant change in the auditing profession. Using previous literature as a foundation, forty-four variables that contribute to auditor switching are presented and tested based on empirical data elicited by means of a questionnaire survey of sample companies that experienced auditor switching during the period 1 January 1998 to 30 June 1999 as obtained from Practitioners in the KwaZulu-Natal Region. The factors motivating auditor switching were based on a questionnaire response of seventy-five companies (response rate 67% ). The empirical study also tested whether or not the switch variables thus identified are statistically related to auditor switching. The findings of this study revealed that audit fees are both the most frequently cited reason for switching auditors and found to be statistically significant at the 0.05 level of significance. Dissatisfaction over the overall quality of services provided by the auditor, lack of communication including the lack of responsiveness to client needs, poor working relationship with audit partner followed as switch factors but were not found to be statistically significant at 0. 05 level. The findings of this study revealed that two other variables, namely, management change and the need for group auditor rationalisation, appear to be significantly related to auditor switching at the 0.05 1evel of significance. / Auditing / M. Comm. (Auditing)

Text in English / This study explores the phenomenon of auditor switching. The purpose of this study is to further contribute to the auditor switching literature by examining the reasons client companies in South Africa switch auditors, where the topic has not previously been studied and following a period of rapid and significant change in the auditing profession. Using previous literature as a foundation, forty-four variables that contribute to auditor switching are presented and tested based on empirical data elicited by means of a questionnaire survey of sample companies that experienced auditor switching during the period 1 January 1998 to 30 June 1999 as obtained from Practitioners in the KwaZulu-Natal Region. The factors motivating auditor switching were based on a questionnaire response of seventy-five companies (response rate 67% ). The empirical study also tested whether or not the switch variables thus identified are statistically related to auditor switching. The findings of this study revealed that audit fees are both the most frequently cited reason for switching auditors and found to be statistically significant at the 0.05 level of significance. Dissatisfaction over the overall quality of services provided by the auditor, lack of communication including the lack of responsiveness to client needs, poor working relationship with audit partner followed as switch factors but were not found to be statistically significant at 0. 05 level. The findings of this study revealed that two other variables, namely, management change and the need for group auditor rationalisation, appear to be significantly related to auditor switching at the 0.05 1evel of significance. / Auditing / M. Comm. (Auditing)

This study was conducted to generate an in-depth understanding of key internal audit function (IAF) customers’ perceptions of the work performed by the Department of National Treasury’s IAF. This study was further intended to address the absence of any qualitative study of IAF customers’ experiences and expectations, and their perceptions of the challenges the IAF faces. The study had five research objectives, namely: to identify the role of the IAF in the public sector in relation to its customers; to discuss strategies to meet the expectations of IAF customers; to determine the experiences of the identified key IAF customers of the work performed by the IAF in the National Treasury; to determine the expectations of the identified key IAF customers of the IAF in the National Treasury, and to ascertain what the identified key IAF customers perceive to be challenges facing the IAF in the National Treasury. In order to achieve the research objectives, the study implemented a qualitative research design using the National Treasury as a case study. Data were collected through semi-structured interviews with participants selected from the key IAF customers’ categories (comprising the audit committee (AC), executive and senior managers, programme and operating managers, and external auditors). Three main themes emerged from the identified key customers’ views. These were (1) Experiences, which revealed that the participants were reasonably satisfied with the work of the IAF in the National Treasury. Participants from the AC, the executive and senior managers, and the Auditor General of South Africa (AGSA) felt that the IAF does add value, while the programme and operating managers participants indicated that the IAF does not demonstrate a holistic view when it conducts evaluations. (2) Expectations, the AC participants expected the AGSA to be able to rely on the work of the IAF, that the IAF should maintain a findings register, and that it should demonstrate IT skills. Executive and senior managers participants expected the IAF to add value to the strategic direction of the National Treasury. Programme and operating managers participants expected the IAF to be open and consultative, to set realistic audit plans, to provide regular feedback, and to demonstrate knowledge of the business. The AGSA participants called for the IAF to demonstrate technical competencies as well as independence and objectivity. (3) Challenges, participants perceived the IAF’s lack of knowledge of the business, the limited reliance placed on its work by the AGSA, the lack of audit action monitoring processes and the lack of management support for the IAF as its biggest challenges. This study could benefit the National Treasury’s IAF by helping it to understand the changing needs and expectations of its customers, and to identify areas for improvement. It may also benefit professional audit bodies and the newly-established National School of Government by providing them with insights into the training needs of internal auditors, and the necessity of providing continuing professional educational programmes. / Auditing / MCom (Auditing)

Audit evidence enables the auditor to express an opinion on the financial statements. To address the risk that the auditor may express an inappropriate opinion, the nature, timing and extent of audit procedures must be responsive to the assessed risks of material misstatement. The auditor must aggregate the levels of assurance obtained from different combinations of tests of controls, substantive analytical procedures and tests of details to respond to the assessed risks. These evidence planning decisions are complex and require professional judgement. Research has found that the extent of audit procedures is not linked to the assessed risks and that auditors may not know to aggregate evidence from different types of audit procedures. Research also supports the use of a structured audit methodology that includes decision models, to guide the application of professional judgement. This leads to the overall objective of this study: the development of an integrated audit evidence planning model to quantify the extent of audit evidence. The study employs a grounded theory model building approach, interpreting the relevant concepts and principles from the literature review into the development of the model. The integrated audit evidence planning model quantitatively relates the extent of audit evidence in a logical and structured manner with the risk assessment and three distinct overall levels of assurance needed to support the audit opinion. It uses the cumulative nature of audit evidence and the compensatory inter-relationship between tests of controls, substantive analytical procedures and tests of details to quantitatively aggregate the extent and levels of assurance from the different combinations of procedures to obtain reasonable assurance at the required overall level of assurance. The model provides a framework for influencing and guiding the exercise of professional judgement and is a practical and effective tool to benefit the users thereof when conducting an audit. Thus, the study models the extent of audit evidence with reference to the aggregation of different types and combinations of evidence and the linkage between the risk assessment and the extent of evidence that provides a flexible framework for the application of professional judgement regarding the gathering of audit evidence. / Auditing / D. Com. (Auditing)

This study was conducted to generate an in-depth understanding of key internal audit function (IAF) customers’ perceptions of the work performed by the Department of National Treasury’s IAF. This study was further intended to address the absence of any qualitative study of IAF customers’ experiences and expectations, and their perceptions of the challenges the IAF faces. The study had five research objectives, namely: to identify the role of the IAF in the public sector in relation to its customers; to discuss strategies to meet the expectations of IAF customers; to determine the experiences of the identified key IAF customers of the work performed by the IAF in the National Treasury; to determine the expectations of the identified key IAF customers of the IAF in the National Treasury, and to ascertain what the identified key IAF customers perceive to be challenges facing the IAF in the National Treasury. In order to achieve the research objectives, the study implemented a qualitative research design using the National Treasury as a case study. Data were collected through semi-structured interviews with participants selected from the key IAF customers’ categories (comprising the audit committee (AC), executive and senior managers, programme and operating managers, and external auditors). Three main themes emerged from the identified key customers’ views. These were (1) Experiences, which revealed that the participants were reasonably satisfied with the work of the IAF in the National Treasury. Participants from the AC, the executive and senior managers, and the Auditor General of South Africa (AGSA) felt that the IAF does add value, while the programme and operating managers participants indicated that the IAF does not demonstrate a holistic view when it conducts evaluations. (2) Expectations, the AC participants expected the AGSA to be able to rely on the work of the IAF, that the IAF should maintain a findings register, and that it should demonstrate IT skills. Executive and senior managers participants expected the IAF to add value to the strategic direction of the National Treasury. Programme and operating managers participants expected the IAF to be open and consultative, to set realistic audit plans, to provide regular feedback, and to demonstrate knowledge of the business. The AGSA participants called for the IAF to demonstrate technical competencies as well as independence and objectivity. (3) Challenges, participants perceived the IAF’s lack of knowledge of the business, the limited reliance placed on its work by the AGSA, the lack of audit action monitoring processes and the lack of management support for the IAF as its biggest challenges. This study could benefit the National Treasury’s IAF by helping it to understand the changing needs and expectations of its customers, and to identify areas for improvement. It may also benefit professional audit bodies and the newly-established National School of Government by providing them with insights into the training needs of internal auditors, and the necessity of providing continuing professional educational programmes. / Auditing / MCom (Auditing)

Audit evidence enables the auditor to express an opinion on the financial statements. To address the risk that the auditor may express an inappropriate opinion, the nature, timing and extent of audit procedures must be responsive to the assessed risks of material misstatement. The auditor must aggregate the levels of assurance obtained from different combinations of tests of controls, substantive analytical procedures and tests of details to respond to the assessed risks. These evidence planning decisions are complex and require professional judgement. Research has found that the extent of audit procedures is not linked to the assessed risks and that auditors may not know to aggregate evidence from different types of audit procedures. Research also supports the use of a structured audit methodology that includes decision models, to guide the application of professional judgement. This leads to the overall objective of this study: the development of an integrated audit evidence planning model to quantify the extent of audit evidence. The study employs a grounded theory model building approach, interpreting the relevant concepts and principles from the literature review into the development of the model. The integrated audit evidence planning model quantitatively relates the extent of audit evidence in a logical and structured manner with the risk assessment and three distinct overall levels of assurance needed to support the audit opinion. It uses the cumulative nature of audit evidence and the compensatory inter-relationship between tests of controls, substantive analytical procedures and tests of details to quantitatively aggregate the extent and levels of assurance from the different combinations of procedures to obtain reasonable assurance at the required overall level of assurance. The model provides a framework for influencing and guiding the exercise of professional judgement and is a practical and effective tool to benefit the users thereof when conducting an audit. Thus, the study models the extent of audit evidence with reference to the aggregation of different types and combinations of evidence and the linkage between the risk assessment and the extent of evidence that provides a flexible framework for the application of professional judgement regarding the gathering of audit evidence. / Auditing / D. Com. (Auditing)