Zuydam Konsult

Zuydam Konsult Accountants Bellville

The accountant’s new dawn

By Jerry Schuitema.


Seeing the numbers through a different lens.


Few professions have been through as much scrutiny and criticism as the accountants have in recent times. This in the wake of a number of high-profile scandals that not only questioned their lack of oversight, but whether they were indeed part of the malfeasance in some cases.


It may have been somewhat overdone, but not unexpected. When things go wrong, it is fashionable to blame the watchdog rather than the perpetrator: especially when there is a popular perception that the accountant’s primary role is oversight and compliance. Coupled with the concept that the main purpose of corporate capital is to maximize capital- and tax efficiencies in a highly complex maze of multinational structures; and constantly expanding and differing legislation and rules around ethics, governance and sustainability; the accountant’s role in reconciling all of these with financial performance has become far more critical and exposed to public scrutiny and accountability.


This has placed them firmly as standard bearers in a particular camp that seeks to defend and protect the classic “institutional” and metric-driven understanding of business. That understanding gave birth in the 80’s to the “shareholder-value” model and is still largely followed today. At the same time, however, some notable thought leaders have baulked at this “dehumanizing” of business and new organisational theories such as the Stakeholder approach; Triple Bottom Line; the Balanced Scorecard, Servant leadership and more recently our own King IV governance prescriptions, tried to redefine business’s role in society and counter the exploitive institutional profit driven view.


So there are basically two perspectives of business:

  • Institutions driven by maximum gain for shareholders or
  • Collectives fostering meaningful and mutually enabling relationships between people.


It is too simplistic to categorise this as “people versus profits”. That is 19th century ideological rhetoric and ignores the fact that the two are not mutually exclusive. Nor are they irreconcilable and contradictory. It is purely a matter of changing perceptions around purpose — from reward to contribution; from profit to service (which most companies do anyway in their mission and vision statements). There is also an existential reality that to create tangible value, business has to make a difference to others; has to add value to people’s lives through the service or product they provide. An obsession with numbers, costs and profits, will be to no avail if that existential reality is not met in the first place.


Can the accounting profession awaken to that new dawn? With some recalibration of their current accounting lens, I believe they not only can, but could become a critical contributor in ensuring not only profitability and sustainability for their institutions or clients, but take a huge leap in improving their current image as well as becoming the most important catalyst in enhancing the understanding of business as collectives creating value for all.


Most of what is out there in 3BL, BS and King IV is seen to be burdensome additions; as collateral to the narrow purpose of enhancing shareholder value. I have yet to witness any of these highly costly and cumbersome processes have any effect on popular perceptions of business. In addition, there is little, if any proof that they have indeed specifically contributed to greater shareholder value.


What is needed is an accounting lens that aligns all participating parties to a single common purpose of value or wealth creation and a common fate in wealth distribution. The King IV creed of “creating value for all” cannot be captured in a single measurement such as profit. But it can in value-added, or wealth creation which is not only the oldest economic principle known to mankind, but also the most powerful that sustains all other benefits. I have referred to it as the “magnificent metric.”


Over many years, I have examined and researched the value added statement as the most suitable lens that can do that. I came to the conclusion that both the VAS and the Cash-Vas were still looking at the numbers from a shareholder perspective and after many discussions with leading practising accountants, I came up with a format called the Contribution Account©. It is neutral in stakeholder priorities and palatable to and understandable by all the participants.


Working with this format automatically draws one into the “meaningful relationships” perspective of business. It should, but need not be the main strategic driver but can become a highly effective operational process in transforming perceptions and behaviour. It is the ideal method of sharing financial information with all in the company: and through many different media: print, electronic, social and even role play. It also offers accounting practitioners the opportunity to become communicators, teachers and enablers on a much broader scale.


They then take a significant step in becoming part of a new understanding of business in society.


This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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