UCT students have been the fortunate beneficiaries of 36 years of teaching excellence from Alex Watson. Students can not forget her formidable grasp of complex accounting standards. Colleagues have witnessed her incredible work ethic, for example, disappearing from Cape Town for a few days and returning with over 400 marked accounting scripts. The accounting profession has looked to her opinion when differences arise. The Global Reporting Initiative wants her voice to help shape their future. Boards of companies (most recently Steinhoff) likewise have enlisted her to help lead their organisations. Alex will continue with many of these initiatives but her 36 year run of lecturing the UCT PGDA class has come to an end.
The final undergraduate class, knowing that they will not have her in 2019, requested that she deliver a final lecture. Here are the highlights:
When reflecting on her years as a student in 1978, Alex pointed out that there were no calculators, only 6 women in a class of 250 and only 4 accounting standards to help you prepare financial statements. A lot has changed since then!
Alex then raised a number of questions and trends that students should be aware of
- Are financial statements useful? Human capital and brands are currently ignored by accountants but they form the majority of the value for companies like Facebook and Google. Have we got this right?
- The complexity of IFRS has also made it increasingly hard to understand financials.
- Are the biggest risks reflected in the financials? It’s often not the case. Key audit matters being disclosed is helping to close this gap.
- Investors need more than what the financials provide. To get an understanding of what investors care about, Alex recommends reading the BlackRock Investment Stewardship priorities.
- Integrated Reporting much more relevant than financial statements. It tells the story of future value creation and speaks to the key risks. The Global Reporting Initiative is helping businesses and governments understand and communicate critical sustainability issues. The GRI is focused on disclosing the UN’s 17 sustainable development goals.
- The future of reporting is likely to focus on “Core and More”. Core = relevant to all. More = differs for different stakeholders. For many SA companies, mandatory spreadsheets will need to be sent to government from 1 July 2018. Called XBRL reporting, this is a major change. Read this article from SAICA (AccountancySA, 1 Feb 2018) here.
Finally a time of Q&A (Question and Alex!)
Q: If Integrated Reporting has less of a financial emphasis, what is the future role of accountants?
Alex: Financial info will always be relevant (banks need them for loans, equity investors before investing) even if financial statements become less relevant. Critical thinking skills are now more important than ever.
Q: After teaching for 36 years, what key factors for future success have you identified?
Alex: 1. How you handle failure. We all make mistakes, but will you learn from them? 2. Tenacity. Will you sit down and work hard even when it is tough?
Q: Why sit on the Steinhoff board when it is in trouble?
Alex: It is a social duty, I want to make a difference to those employees. There is a risk to my reputation but I trust my fellow board members.
Q: Where are the USA in terms of accounting standards?
Alex: The USA has moved closer but not by as much as many hoped. Non-USA companies using IFRS don’t need to restate financials when reporting in the USA so that is some progress.
Let’s take a moment to celebrate
The world of accounting has changed enormously since 1978! Prof Alex Watson, through her teaching and more so the example she set, has inspired and helped so many of us. We celebrate your massive contribution Alex!
Were you taught by Alex? Do you have any words you would like to share with her? Please reply in the comments or feel free to email me – firstname.lastname@example.org – I will collate them and pass them on to this legend of the game.
P.S. Alex spoke to the final undergraduate accounting class at 8am this morning, but you still have a chance to hear her at noon in James 3A.