South African Accounting Standards

Published: 2021-09-14 14:20:10
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Throughout history, many components have shaped the way a country develops itself both economically and financially. To fully understand a country's accounting standards one must explore such environmental factors as the history, demographics, economy and the legal system of a country. South Africa is a dynamic country full of diversity. It is hard to understand the structure of the accounting profession without first learning how South Africa developed into the country it is today.
The history of South Africa is one of change and adversity. It is important to understand that South Africa is a democracy but it did not become a democracy until 1994, when it held its first democratic elections. The African National Congress (ANC) led the first democratic government. The first President was Nelson Mandela. South Africa's switch to democracy is only one of several changes in government style that the country has experienced over its history. Around the 1700s, the Dutch were the first European settlers in southern Africa. Slaves were imported to South Africa from East Africa, Madagascar, and the East Indies. This slavery brought with it different language and was not abolished until 1838. In the 1860s diamonds were discovered in South Africa causing tens of thousands of people moved into that area to find new wealth in the diamond industry (History).
In 1910 the Union of South Africa was created and was to be essentially a white union when it came to political rights and powers. The British established the union. The power was centralized. It was this leadership that caused the accounting standards in South Africa to be patterned after the United Kingdom. In 1932 South Africa stopped using the gold standard for money. In 1961 South Africa became a republic. In the 1970s black workers went on strikes and demanded more rights. They felt that they were inferior to the whites. There was a new constitution enacted in 1984. This allowed for more seats to be filled by whites than any of the other races combined. It was not until 1994 when South Africa had their first multiracial election (South Africa: History). These changes in political and governmental structure have had a great impact on financial accounting.
The history of South Africa is one full of strong political turmoil, reinforcing the importance of politics on setting standards within the country. The changes in the political structure of South Africa have been so severe that it is important to look at the structure more in depth to understand why South Africa has chosen to model it is accounting standards after the International Accounting Standards.
South Africa is a republic, containing a central government and nine provincial governments. Its bicameral parliament is chosen every five years and consists of the National Council of Provinces (the upper house) with 90 members, and a National Assembly (the lower house) with 400 members.

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