The document discusses the evolving relationship between accounting and human resources (HR). It notes that accountants traditionally viewed HR professionals negatively but that modern HR requires more collaboration with finance. The document outlines the history of accounting standards in South Africa dating back to the 1970s and their increasing alignment with international standards over time. It discusses the concept of "triple bottom line" reporting of financial, social and environmental impacts. The document argues that developing HR standards could help professionals contribute more to sustainability goals and integrate how they work with other functions like accounting. Overall it presents the case for HR adopting more standardized and quantifiable approaches inspired by accounting practices.

1. Charting the Future
Accounting and HR
Shirley Olsen
Chairman of the South African Institute of Professional Accountants
August 2014

2. Overview
• Accounting and the HR Profession
• History and the Importance of Accounting Standards in the Profession
• TheTriple Bottom Line
• Valuable Journey for the HR Profession?
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3. Accounting and the HR Profession
Accountants when asked
• To think of two adjectives that describe the
human resources professionals in their
organization?
• Most often the words that leap to mind
• “unnecessary” and
• “mathematically impaired”
• That is yesterdays thinking !!!!
Todays HR Department
• Is becoming
• a sophisticated bottom-line business partner that
requires more input and collaboration from the
finance department than ever before.
• From sharing relevant employment data
• to maintaining joint responsibility for projects,
• HR and finance should be great pals, not warring
adversaries.
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4. Strategy to identify careers
• Place 400 bricks in a closed room.
• Put your new employees in the room and close the door.
• Leave them alone and come back after 4 hours.
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5. If they are:- Put them in:-
counting the bricks Accounting
recounting them Auditing
have messed up the whole place with the bricks Engineering
arranging the bricks in some strange order Planning
throwing the bricks at each other Operations
sleeping Security
have broken the bricks into pieces InformationTechnology
sitting idle Human Resources
have tried different combinations, they are looking
for more, yet not a brick has been moved
Sales
have already left for the day Marketing
staring out of the window Strategic Planning
talking to each other, and not a single brick has
been moved, congratulate them and move them
into
Top Management.
Analyse the situation you find
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6. Attributes
Accountants
• Use History to Predict the future
Human Resources
• Use the Present to Inform the Future
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7. History and Importance of Standards in the
Accounting Industry
• Early 1970’s - SouthAfrican GAAP ( General Accepted Accounting Practice )
• Accounting standards for the domestic context were nevertheless not
developed in isolation from international accounting standards
• Reciprocity agreements with professional accounting associations since the
1950s resulted in a very international footprint of the accounting profession in
South Africa
• Whilst International sanctions limited business links, these where never entirely
shut out and there were still international investors
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8. History and Importance of Standards in the
Accounting Industry
• Access to reliable financial information on South African businesses was
vital for international investors.
• This depended on the availability of ‘decision useful’ financial information,
which was premised on high accounting standards and internationally
accessible and comparable accounting information.
• The integration of accounting knowledge internationally was beginning to
take shape through the initiatives to establish the International Accounting
Standards Board .
• The South African accounting profession joined those initiatives from the
inception of the IASB onwards 8

9. The Accounting Practices Board ("APB")
• 1973 to consider and issue what should be generally accepted accounting
practice
• Private sector body consisting of a number of accounting and industry
bodies
• 1990’s IFRS standards were adopted and approved for use by SA companies
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10. Financial Reporting Standards Council (FRSC)
• Establishment in late 2011
• Legally constituted standard-setter for South Africa
• The APB became redundant and the need for SA GAAP had to be re-
evaluated.
• SA GAAP are effectively the same as IFRSs with the exception of
• IFRS 1 - First-timeAdoption of International Financial Reporting Standards
• new IFRSs/IFRICs and amendments to IFRSs that were issued by the International
Accounting Standards Board (IASB) after May 2011.
• Working closely together, the APB and the FRSC jointly agreed to withdraw
SA GAAP for financial periods commencing on or after 1 December 2012.
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11. 11
1950
Reciprocity
Agreements with
International
Professional
Accounting
Associations
1970
Gaap
Accounting
Practices Board
1990
APB approved IFRS
for SA Use
2011
FRSC
Financial Reporting
StandardsCouncil
2012
IFRS
TheTime Line of our Standards

12. Some of the Players in the Accounting Profession -
Regulators, Standard Setters and Associations
National
• The Accounting Standards Board (ASB)
• Financial Reporting Standards Council (FRSC)
Global
• The IFRS Foundation
• The IASB (International Accounting
Standards Board) is the independent
standard-setting body of the IFRS
Foundation.
National
• South African Institute of Chartered
Accountants (SAICA)
• South African Institute of Professional
Accountants (SAIPA)
Regional
• Pan African Federation of Accountants (PAFA)
Global
• International federation of Accountants (IFAC)
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13. 13

14. • SAIPA is the leading Professional Accountancy institute in South Africa for the
suitably qualified Professional Accountant(SA).
• The Professional Accountant(SA) performs a wide range of accounting and tax
related services and is regarded as the business advisor to the SME ( Small
Medium Enterprise)offering tailored advice on business challenges and
creating opportunities of business success for their clients .
• The requirements to earn the designation are:
• Academic: A Degree with a major in financial accounting and with tax,
management accounting, auditing and commercial law as subjects.
• Practical training or experience: at least 3 years under a SAIPA recognised
Learnership, or 6 years of relevant verifiable experience.
• SAIPA Professional Evaluation: This is a 4 hour examination offered twice
yearly covering [1] Financial Accounting, Auditing, Taxation, Commercial
Law, Management Accounting and Practice Management.
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15. Why International Standards?
• Soccer can be played anywhere in the world, irrespective of language, laws
or culture
• Soccer transcends national borders, operating within an internationally agreed
framework of rules which has nothing to do with nation states, sovereignty or local
jurisdiction. International soccer tournaments and transnational matches are
controlled and managed by the soccer profession and its ruling body.
• The accounting equivalent of soccer's rules is International Accounting
Standards.
• 2 linked sets of standards.
• International Financial Reporting Standards (IFRS)
• International Public Sector Accounting Standards (IPSAS)
• These standards apply throughout the world and are not under the control of
Governments: they are not instituted by legislation or ratified by international treaties.
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16. Nature of Corporate Reporting Evolution
• The nature of corporate reporting has evolved enormously over the past few
years
• Inception of King III in March 2010
• Stipulates that listed companies should submit an Integrated Report
• Many have subsequently dubbed Integrated Reporting as a complex
process.
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17. Nature of Corporate Reporting Evolution
• Rationale behind Integrated Reporting was not to complicate reporting on
business operations.
• It was rather created to stimulate integrated corporate strategies that
are driven towards truly sustainable businesses.
• Companies that fully understand these King III principles and incorporate it
in their core business strategies, will have no trouble at all with providing an
Integrated Report on their business activities.
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18. The meaning of Integrated Reporting
• King III is the abbreviated name for the King Report on Corporate
Governance for SouthAfrica published in 2009, which officially came into
effect on the 1st of March 2010.
• King III specifies that companies should issue an annual Integrated Report
that provides a reliable, comprehensive and holistic overview of the
company, from both a financial and a non-financial perspective.
• A key aspect of Integrated Reporting is that companies should be able to
outline the impact of their businesses on all three the spheres within which
it operates: economic; social and environmental.
• These three elements are known as theTriple Bottom Line.
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19. History of 'Triple Bottom Line'
• A phrase coined in 1994 by John Elkington and later used in his 1997 book
"Cannibals With Forks:TheTriple Bottom Line Of 21st Century Business"
describing the separate financial, social and environmental "bottom lines" of
companies.
• A triple bottom line measures the company's economic value, "people
account" – which measures the company's degree of social responsibility
and the company's "planet account" – which measures the company's
environmental responsibility.
• Elkington argued that companies should prepare three bottom lines – the
triple bottom line – instead of focusing solely on its finances, thereby giving
consideration to the company's social, economic and environmental impact.
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20. Challenges ofTriple Bottom Line
• TheTriple Bottom Line concept developed by John Elkington has changed
the way businesses, non-profits and governments measure sustainability
and the performance of projects or policies
• Became a standard in AmericaAccounting
• Beyond the foundation of measuring sustainability on three fronts—people,
planet and profits—the flexibility of theTBL allows organizations to apply
the concept in a manner suitable to their specific needs.
• There are challenges to putting theTBL into practice.
• These challenges include measuring each of the three categories
• finding applicable data
 calculating a project or policy's contribution to sustainability
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21. Triple Bottom Line
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22. IntegrationThinking
• Integrated reporting is defined as “a process founded on integrated thinking that
results in a periodic integrated report by an organization about value creation
over time and related communications regarding aspects of value creation”.
• The integrated report and integrated reporting is very much based on integrated
thinking.
• This is defined as “the active consideration by an organization of the relationship
between its various operating and functional units and the capitals that the
organization uses or affects.
• Integrated thinking leads to integrated decision-making and actions that
consider the creation of value over the short, medium and long term”. 22

23. Valuable Journey for the Profession?
• The move from traditional HR policies and programs to more
sustainable standardised ones
• Standards will encourage HR professionals to broaden their
thinking about how they can contribute to sustainability
• Standards will assist in integrating the way people think
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24. More advantages
• Alignment to accounting concepts of consistency, relevance,
usefulness, comparability etc.
• Demonstrating the return on human capital investments
• Easier measurement across organisations
• Potential Inclusion in the annual integrated report in future
• Being taken seriously by their financial counterparts in the
boardroom!
• Defending HR decisions around pay and performance
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25. • https://www.youtube.com/watch?v=fUXdrl9ch_Q
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Examples of Poor Integrated thinking and Good IntegratedThinking

26. “You can have the best strategy and the best
building in the world, but if you don’t have the
hearts and minds of the people who work with
you, none of it comes to life.”
– ReneeWest, Luxor and Excalibur Hotel
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27. Shirley Olsen
ProfessionalAccountant,Trainer and Mentor
Shirley@tfr.org.za
Thank you SABPP for giving a SAIPA member the
opportunity to be the 1st accounting body to present at
such a high profile event,
I am confidents Professional Accountants will be excited
and willing to walk with HR on this journey.
I wish you every success in todays case studies of making
these standards meaningful for all you and that you will
be able to go back next week and start to implement them
into your workplace
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