‘Focus on cost reduction vital’

THE Institute of Chartered Accountants Zimbabwe recently held its annual Winter School in Victoria Falls. Zimbabwe Independent senior reporter Kudzai Kuwaza (KK) chats with  ICAZ’s newly elected president Walter Mupanguri (WM) to get some insights on how he intends to steer the ship over the coming year.

 
KK: What goals have you set for your term of office?

 
WM:  These will be centred on the completion of ICAZ’s three year strategy.    The matters that remain to be completed are:

 

 

  • The introduction of a second tier of affiliation for those students that completed articles but are still to qualify,
  • Improvement in the quality of half year and full year reporting for companies quoted on the Zimbabwe Stock Exchange,
  • The establishment of a one year post graduate course as opposed to the current two year course,
  • The revitalisation of the ICAZ Southern  African Chapter
  • Commencement of establishment of Mutual Recognition Agreements with other institutes such as that of Australia and New Zealand

 

KK: What are you doing as an institute to strengthen your financial base which is mainly reliant on subscriptions from members?

WM: We have recently established a fund raising committee that will be working with the executive committee of the day to raise funds for the institute.  In addition, we need to team up with regional bodies in order to attract funds from funders such as the World Bank for specific projects.

A substantial number of projects that have been benefiting the profession as a whole have been executed by ICAZ members who work on a voluntary basis and at times at a cost to ICAZ.

 
 KK: You have adopted new training methods for your members (students).Why and how are they more effective than the previous training methods?

WM: Previously the training of students was two-fold.  A student had to complete the stipulated hours as well as gain the relevant experience on the job.  The new training regulations now require the student to acquire a variety of competencies in order for their articles to be signed off.  This is a better method as it focuses on the student’s competency as opposed to whether they had completed the stipulated hours or not.

In addition the competencies are biased towards the specific focus of the student.  The competencies also include “soft skills” competencies which were not specifically required in the old system.  The Chartered Accountant that emerges at the end of the day is more adaptable to the needs of the profession globally and to the needs of industry and commerce globally.

 
KK: What are your views as ICAZ on the mid-term fiscal  budget presented recently by finance minister Tendai Biti?

WM: Any fiscal policy statement is as good as the commitment of all us as a nation.  In my view, for any policy statement to succeed we need to have one national vision that we rally around.  This will ensure buy in from all elements of the economy.  This way, success is the only option.

 
KK: You recently signed MRA’s with  England and Wales and South Africa. How do these benefit your members?

WM: Before signing these MRA’s any ICAZ member who wished to be a member of any of the two institutes would have had to write conversion examinations.  The reverse was also true for anyone wishing to be an ICAZ member.  The signing of these MRA’s means that we have done away with this requirement for conversion examination except if one wishes to practice as a “Public Auditor” in the new jurisdiction.

 

During the period of hyperinflation a good number of Chartered Accountants emigrated to South Africa and the United Kingdom.  Through these MRA’s they will be able to join these Institutes and they will enjoy the same benefits as members of those countries do.  As you know the profession is continuously evolving. These members will be able to stay up to date with developments through attendance of relevant courses and receipt of relevant publications that would not have been possible were they not members of those institutes.

 
KK: Several companies during the last earnings season have reported losses or are performing below financial targets, apart from marketing considerations could this also be a function of poor financial management?
WM: If it were for poor financial management, then more of these companies would have folded during the era of hyperinflation.  Rather, companies are unable to operate at optimum levels due to undercapitalisation.  During the era of hyperinflation companies were not able to replace machinery nor were they able to access foreign currency to retool.  This has left our companies at least ten years behind and therefore unable to compete with the influx of imported goods that are landed here at prices lower than our companies can offer.

 
KK: In terms of financial prudence, what   steps should accountants/financial managers take in order to help resuscitate companies.

WM: There is need to focus on cost reduction.  This means that there is need to cut costs to the bone and ensure that any costs are representative of the value provided.  The improvement of internal control systems would ensure that there are no revenue leakages as well as streamlining systems in order to improve performance.
They also need to realise that it is no longer business as usual.  In a lot of cases the management that served companies in the hyperinflation era is the same management that is still in place.  That formula will not work.  There is need to overhaul  all of the business’s processes as the formulae that worked during hyperinflation will not work today.

 
KK: Who is Walter Mupanguri?

WM: I am currently the Regional Managing Partner of the Central Africa Region of Ernst & Young (Zimbabwe, Zambia and Malawi.  I am also a member of Ernst & Young’s  Africa Executive which manages the firm across the African continent. I have over 20 years experience in the audit field and in particular dealing with large and complex entities. Clientele spans over the mining, insurance, manufacturing and telecommunications sectors. I have served on the Institute of Chartered Accountants of Zimbabwe  Council for eight years and its Education Committee for 11 Years. I am married to Kate and have a son and daughter.

I was born in Murewa in 1966 and educated at Shiriyedenga Goverment Primary School , Highfield High School and Cranborne Boys High School. I am  a Liverpool and Dynamos supporter and enjoy going to the gym.  I am a devout Roman Catholic.

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