Includes bibliographical references. / The equity transfer of Black Economic Empowerment deals has been the basis that still defines the Black Economic Empowerment landscape. Black Economic Empowerment concepts are identified with endeavours in South Africa to increase the participation of Black people in business and the mainstream economy. In recent years, equity transfer has been the main benchmark to signify the extent to which a company is empowered. This new construct is Black Economic Empowerment. Black Economic Empowerment is a concept, which is broadly accepted in principle, but is still controversial in its meaning and practice. This report looks at the commonly, agreed and understood Black Economic Empowerment net equity transfer of selected Black Economic Empowerment transactions versus the effective net equity transfer. Its also examines the role that funding structures, funding institutions, the government and private sector play in Black Economic Empowerment transaction. The effect of debt in Black Economic Empowerment transactions, and the impact it has on the effective transfer of net equity interest to Black people will also be examine in this report. The study will also look into the need for Affirmative Action, the state of Black Business and its historical development and its contribution to Black Empowerment. The successes of Black Economic Empowerment transaction are contrasted against the transaction failures, while the report examines the cause of these failures. The findings of the study concludes that only one percentage of the selected transaction in the study yielded a net effective interest greater or equal to the announced transaction.

Includes abstract. / Includes bibliographical references. / Research in behavioural finance has shown that individuals do not always behave rationally. As a result of this they do not make investment decisions in such a way as to maximise their expect- ed utility. Certain behavioural biases have been found to explain this behaviour. Furthermore, differences have been observed in how these biases manifest in men and women. Men have been found to be more overconfident when estimating their own skills and chances of success. Hence, they tend to exhibit stronger self-efficacy and self-attribution biases. Differentials in the risk preferences of men and women are apparent: men display higher risk tolerances and women are more risk averse. A sample of 19,021 individual investors from a South African investment house was analysed over five years (2007 - 2011) in order to draw conclusions on the trading behaviour.

During recent decades, researchers have developed the value relevance method of accounting based research. Value relevance, at its core, attempts to describe the information usefulness of a disclosure figure in relation to the impact it has on the market values of a given stock. Much of the focus of this research, both internationally and locally, has been based on earnings or balance sheet disclosures with little attention being paid to other sections of disclosure. This study takes the use of value relevance methods one step further and analyses the information usefulness of operating cash flow disclosures of financial firms versus non-financial firms in a South African context. The study proceeds to explain and then test the presumption that the nature of the banking business model makes operating cash flow disclosures irrelevant; some interesting and somewhat counter-intuitive results are obtained.

Includes bibliographical references. / This study analyses the impact that operating lease capitalisation has on key financial statement ratios and failure prediction indicators of listed South African companies operating within five sectors (namely General Industrials, Industrial Transportation, Food & Drug Retailers, General Retailers and Travel & Leisure), as well as whether the impact thereof is substantially the same as the new proposed accounting treatment for Type A and Type B leases in terms of ED/2013/6 (IASB, 2013). Furthermore, the extent of lease usage in South Africa and whether the size of a company has a bearing on its extent of leasing is examined. Additional analysis is also performed investigating the materiality of straight-lining and onerous contract provisions relating to operating leases, as well as the impact of operating lease capitalisation on disclosed loan covenants. Based predominantly on the constructive operating lease capitalisation method developed by Imhoff, Lipe and Wright (1991 & 1997), a refined constructive lease capitalisation model is developed in this study which incorporates aspects of current lease accounting rules not previously considered, namely provisions recognised in respect of the straight-lining of operating leases as well as onerous operating lease contracts. This model also incorporates the new proposed lease accounting rules which require the capitalisation of all leases (Type A and Type B). The results indicate that the capitalisation of future non-cancellable operating lease commitments have a significant impact on key financial statement ratios and failure prediction indicators, most notably leverage and other debt-related ratios. Furthermore, of the five sectors analysed, retailers were the most affected. When considering the new proposed accounting treatment for Type A and Type B leases, the results indicate that operating lease capitalisation has substantially the same impact on key financial statement ratios and Altman‟s failure prediction models as the conventional operating lease capitalisation method, except for certain debt-related and profitability ratios. Further results indicate that operating leases are used extensively and substantially more than finance leases within South Africa. It was also found that operating lease usage was positively related to company size, while finance lease usage decreased as company size increased. Curvilinear relationships were also noted between a company‟s size and its extent of leasing. Further analysis revealed that recognised straight-lining lease provisions are substantially more material than recognised onerous lease contract provisions and are capable of distorting the analysis of operating lease capitalisation if ignored. When scrutinising loan covenants disclosed, it was established that none of the loan covenants were breached when capitalising operating leases; however, in each instance operating lease capitalisation negatively impacted all covenant related ratios.

Includes abstract. / Includes bibliographical references (p. 41-45). / This study investigates the possible explanatory factors behind the mispricing in dual traded assets, using Mondi Holdings (the PLC listed on the London Stock Exchange and the LTD listed on the Johannesburg Stock Exchange) as a case study. The study documents the existence of substantial mispricing between the Mondi twins, with the LTD trading at an average premium of 9% over the sample period. However, the reclassification of the PLC shares on the JSE resulted in a significant and sharp decline in the LTD premium to an average of 3%, an indication that regulatory controls were significant in sustaining a larger part of the price deviations.

This paper identifies the statistically significant determinants for audit fees in the South African market by regressing audit fees against a selected set of determinant variables. This study is not the first investigating the South African market and so broadens the existing body of research both within the country as well as the global body of research. Determinant variables identified in prior research across the globe were used to establish the existence of a relationship in the local market. This study further extended the local body of research by considering the implication of audit timing and location on the audit fee as well as using more recent data. A positive statistically significant relationship was found between audit fees, asset value, proportion of assets held as inventory and accounts receivables and the number of subsidiaries. In contrast to prior local research, results showed that a large audit firm fee premium did not exist. This was shown to be due to the commoditisation of auditing, cost pressures from companies and increased competition within the audit market. Audits within the Gauteng region were priced at a premium to other provinces whilst the timing of the audit has a statistically significant impact on the audit fee. The validity of the model has improved in comparison to prior South African studies as a result of audit fees being further driven by audit complexity than by size of the auditee.

The disparity in remuneration between company CEOs and other employees is a topical and highly controversial issue globally. Theoretically, there are two explanations for this pay disparity - tournament theory and behavioural theory. Tournament theory says that employees are more motivated to compete with a larger pay gap, while the behavioural theories say that employees feel inadequate and thus demotivated in the presence of a larger pay gap, resulting in poorer performance. In response to growing concerns about the pay gap, new legislation in the USA has required companies to disclose their pay ratios1 in their financial statements, which is also likely to come to South Africa. As a means to explore CEO pay ratios in a South African context, a study of the determinants and performance effects of companies' CEO pay ratios was conducted in the Consumer Goods and Consumer Services subsectors on the JSE. Data was collected on companies for the period 2006 to 2014 and pay ratios were estimated for each company where the data allowed. Due to the complexity of CEO remuneration, three different pay ratios were calculated, which differed in how long-term incentive payments were treated in each case. Using the same method as Shin, Kang, Hyun, & Kim (2015) used in their South Korean study, three different analyses were conducted. Firstly, the factors determining pay ratios were analysed in a regression analysis, which found CEO tenure, companies' future investment opportunities and company size to be key determinants of pay ratios. Secondly, the deviations from companies' expected pay ratios were regressed against subsequent company performance to see whether CEOs being paid the, "wrong," amount relative to employees affects company performance. It was found that deviations from the expected pay ratio negatively affected company performance, and there was no difference in performance between under- and over-paying CEOs relative to employees. Finally, as a means to test whether tournament theory or behavioural theories better explain the CEO pay ratio in South Africa, subsequent company performance was regressed against the three different pay ratios calculated. It was found that there is little evidence of a relationship between subsequent company performance and the pay ratio, except in the case where performance is measured by return on assets, and the pay ratio is measured such that it excludes long-term incentives completely. The relationship in this case was found to be positive, indicating that tournament theory better explained the relationship between pay ratios and company performance. One of the limitations of this study was the limited availability of data, which gives rise to self-selection bias.

Includes bibliographical references (leaves107-113). / Extensive research has been conducted in a variety of countries investigating the extent of underpricing of initially listed companies. In addition, various studies have been conducted in an attempt to try and establish the relationship between disclosure and underpricing. Underpricing remains a vexing issue that continues to stimulate rigorous debate within economic and accounting research. This study seeks to remedy the omission of recent South African research on this subject. The study looks to establish whether underpricing has occurred on the Alternative Exchange of South Africa, (AltX). The AltX was launched on 27 October 2003, as the junior exchange to the larger Johannesburg Stock Exchange (JSE). The study follows the methodology of a previous South African study, by Barlow and Sparks (1986), which looked at the underpricing of shares on the JSE between the periods 1972 to 1986. This study looks at establishing underpricing on the AltX, during the periods October 2003 to March 2007.

Includes bibliographical references (leaves 40-41). / My research question is: "An investigation into the use of derivatives by the 2nd 100 largest listed companies in South Africa" as this is where I have been positioned in the group that is undertaking this research. I will endeavor through this research report to establish not only which companies are using derivatives but through a review of the Annual Financial Statements "AFS" also the reason for the use of derivatives whether only to hedge against for example market risk or whether the companies are using derivatives to speculate. I will also compare the use of derivatives by this subset of South African companies with other studies including those with medium or large companies. I will review the current accounting standards to understand and outline the requirements for these companies. I will also summarise a sample of the previously published papers internationally which delved into a similar topic.

Bibliography: pages 144-152. / Following international trends, the South African unit trust industry has become one of the fastest growing forms of investment in our financial market. Since the first fund was established in 1965, the industry has grown to over 100 funds with more than 20 companies managing these funds. Since 1990 there has been particularly rapid growth in 'Specialist Equity Funds' with more than 30 new 'specialist' unit trusts emerging. Specialist equity fund managers usually concentrate their investments on a particular sector of the economy or alternately aim to satisfy specific characteristic investment objectives. Two classes of specialist equity funds, namely Index funds and International funds, have emerged recently in our unit trust industry and are receiving increasing attention from the investment community. Much attention therefore is given to these funds in this thesis. The growing importance of the unit trust industry has heightened the need to effectively and accurately measure the performance of managed funds. A wealth of literature exists in this field and a number of models have been developed to measure the performance of managed funds and the fund managers themselves. This thesis reviews and demonstrates the implementation of these various measures with the emphasis on providing a practical interpretation of each measure. Although the recent development of Index funds and International funds has received considerable attention in the financial media, little attention has been paid to the technical aspects of the construction of these funds in the academic literature. To the authors knowledge there has been no published research on the construction of Index funds or International funds in South Africa. This thesis examines approaches to constructing Index funds and International funds and empirically assesses these approaches on the Johannesburg Stock Exchange (JSE).