Common Themes in Addictions

It doesn’t matter whether the addiction is to substances, gambling, alcohol, shopping or sex. All those with an addiction share common things:

1. Strong Feelings – Everyone has a wide range of feelings that can be positive or negative. People who lead with their feelings, however, often end up living in the ditch! I have found, over the years that many of my clients who suffer from an addiction state that their anxiety motivates them to turn to unhealthy coping strategies. Their unmanageable feels often play a key role in their addiction pattern.

2. Lack of skills – Those who don’t know how to deal with their feelings in a healthy way, look for alternate methods. For example, someone who has problems with relationships and doesn’t have a good self-image, might be a likely candidate to become a workaholic. They might become very valuable in the workplace and learn specific work skills but doesn’t solve their other personal problems.

3. Enablers – Most people with addictions can name the person who first introduced them to the substance or activity that led to an addiction. They also usually have people in their lives who have contributed to or allowed the addiction to continue with their inappropriate behaviours.

4. Fantasy and Cravings – When a person is thinking about the addiction in an obsessive manner and has cravings to use their focus is not available for their responsibilities.

5. Detachment – Sometimes it may seem like the addict has two people living inside. There is the public person who presents well and the private person who is involved in a secret lifestyle. In many cases, the person has been able to detach one from the other and sometimes even doesn’t remember doing specific things because they have become so good at separating the two. This is common with a number of problem areas such as eating disorders and sexual addictions.

6. Tolerance – Over time, the amount or strength of a substance or activity that is needed to produce a high will need to be increased in order to get the same effect. Those who begin by looking at pornography, for example, may increasingly require more frequent or more powerful images. Some may advance into chat lines and affairs, begin hiring prostitutes or add violence to their sexual experiences.

7. Withdrawal – Distress can occur when the addiction is not fed. A person may become frustrated, angry or unable to function when they are abstaining. Withdrawal can be physiological and/or psychological in nature.

8. Consequences – Those with addictions often also experience relationship problems, financial and employment issues, legal encounters, deteriorating health, shame and self-loathing. Over time, their lives can become unmanageable.

9. Defense Mechanisms – Denial, projection, blaming, repression, rationalization, intellectualization, minimization, deflection and manipulation are some of the ways that the person avoids facing reality and getting treatment.

10. Temptations – A person who is addicted has formed a life that promotes the addiction. Their friends, activities, schedule and habits all revolve around the addiction. S/he are able to get a shot-term “fix” easily as that has been their pattern. Recovery therefore involves facing one day at a time, knowing that commitment to change long-term will be difficult.

11. Opportunities to change – It doesn’t matter where one goes in the world, there are supports and resources to help the person who is addicted. But that person has to be ready and willing to change. Alcoholics Anonymous, group therapy, public agencies and private therapists are only a phone call away. Employers offer Employee Assistant programs and insurance companies usually recognize addiction as a medical issue that qualifies for disability benefits.

12. People who love them – If you are worried about someone who is involved with an addiction, you need help. You cannot change another person but you can work on yourself. The best thing you can do today is book an appointment with a psychologist who specializes in addictions so you can begin working on your healthy future.

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Stockholm Syndrome and Addictions

To understand what a trauma bond is and how it applies to addiction, we will start with a brief lesson on the Stockholm syndrome.

Stockholm syndrome is a condition that causes hostages to develop a psychological alliance with their captors as a survival strategy during captivity.

These feelings, resulting from a bond formed between captor and captives during intimate time spent together, are generally considered irrational in light of the danger or risk endured by the victims. Generally speaking, Stockholm syndrome consists of “strong emotional ties that develop between two persons where one person intermittently harasses, beats, threatens, abuses, or intimidates the other.”

Formally named in 1973 when four hostages were taken during a bank robbery in Stockholm, Sweden, Stockholm syndrome is also commonly known as ‘capture bonding’. The syndrome’s title was developed when the victims of the Stockholm bank robbery defended their captors after being released and would not agree to testify in court against them. Stockholm syndrome’s significance arises because it is based in a paradox, as captives’ sentiments for their captors are the opposite of the fear and disdain an onlooker may expect to see as a result of trauma.

There are four key components that generally lead to the development of Stockholm syndrome:

1. A hostage’s development of positive feelings towards their captor

2. No previous hostage-captor relationship

3. A refusal by hostages to cooperate with police forces and other government authorities

4. A hostage’s belief in the humanity of their captor for the reason that when a victim holds the same values as the aggressor, they cease to be perceived as a threat.

So the important part to understand here is that even though the bond between captor and hostage seems illogical, there is a very logical reason behind it: survival and the need to bond.

The unfortunate experiments done on monkeys by Harlow illustrate the need to bond to survive. Baby monkeys were taken from their mothers at birth and given wood or metal “surrogate monkeys” covered with cloth to cling to. After a while, the baby monkeys saw these mannequins as “their mothers” and preferred them to live individuals. Then later when these babies grew up and had their own young, they had no idea how to parent and even threw their offspring against their cage and sometimes killed them. Yet, the little ones kept coming back to their mothers, preferring possible death to inevitable death and starvation if they were to stay away.

The way Stockholm syndrome is treated is through psychological counseling and the understanding that it was necessary to form an unhealthy bond in order to survive the trauma of captivity. It is a gradual shift in thinking, similar to healing from brainwashing. This does not absolve the victim from accountability but helps them break their unhealthy bond and cultivate new ones.

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Benefits of Taking a Bachelor of Commerce Degree

According to a recent report in Global Financial Monitor, employers are currently facing a talent shortage of finance and accounting professionals. This means job prospects for graduates with a commerce degree are quite promising. A Bachelor of Commerce or B.Com degree is designed to give students managerial skills in commerce related disciplines such as marketing, finance, accounting, and advertising among others. The degree is structured to provide competence in business principles and organizational behavior by focusing on core subjects such as statistics, accounting, law, economics, finance, marketing as well as cooperative education.

Benefits of a Commerce Degree

This is a degree that provides students with expert knowledge in different fields of business management and organization. Most universities have a syllabus for this program that addresses rapidly changing environments in innovation, international focus and market-relevance aspects in the business world. The degree acts a good transition from the academic world to the competitive and highly flexible business world. Here are some of the key advantages of this degree program:

• With a BCom degree you are well prepared to succeed in both self and corporate employment. You can start your own business and run it professionally without the need to pay for expert services such as accountants or market consultants.

• There are high job opportunities for holders of this degree as every company or business requires a Manager, commerce specialist or at the very least an accountant. There will never be a shortage of job opportunities in this field.

• Knowledge in accounting provides you with an ability to understand and analyze financial reports and how they generally affect a business. A good knowledge in cost and management accounting techniques is critical in decision making processes as well as in planning and evaluating the performance of a company’s business activities. The knowledge provides a good foundation in auditing and local as well as international taxation principles.

• Students who have opted to study finance in this degree program have an in-depth knowledge in the role of financial management of a business firm. They can calculate financial ratios and understand how successful companies raise capital, choose lucrative investments and analyze risks. The program also provides you with a good knowledge in the way securities markets operate and how to build an attractive company portfolio.

• Human resource management is another option provided in this degree course. This option prepares students with the necessary skills in identifying, analyzing, and finding solutions to problems related to human resource activities. It covers important organizational processes such as recruitment and selection of employees, talent hunting, promotions, employee welfare, and application of occupational safety process in a company among others.

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Accounting For Insurance Claim Settlements

Insurance is a necessity in any business. Businesses cover themselves against losses such as fire, theft and unexpected natural disasters. It is with the bookkeeping or accounting that owners get it wrong.

On successful insurance claims, a payment is normally made to the insured. My experience has led me to believe that small businesses have no clue, as to how, to account for insurance settlements. Most businesses reflect the payment as income.

Not only would this be deceptive but also violates International Accounting Standards. Since the transaction has everything to do with assets and nothing to do with income, it should be adjusted against assets. Erroneous accounting for assets might prejudice the business further in future, if similar insurance claims are made.

Insurance companies settle claims on assets, on its book value and not its costs. (And yet the asset was insured on its cost at date of purchase). Whereas this principle might vary from country to country, book value is widely accepted as the norm. Since most small businesses fail to maintain proper fixed assets registers, insurance companies perform “desk top valuations”, or make an “estimate”, on the book value, mostly much lower than its “real” book value. Without proper records, the claimant cannot debunk the assessor’s final conclusions.

Before I loose you in a sea of confusion, let me elaborate. If an asset is on your books at least, without the asset register, but you have no purchase date, and this asset is lost due to theft, no accurate wear and tear can be furnished. Furthermore, if a claim is settled, and reflects as “income”, what happens to the asset that was stolen, but still reflects on your books?

Many reading this article could not care a hoot about the number crunching involved, but please stay with me for a minute. You might not care, but an investor, a bank and yes, the insurance company might pick this up on your financial statements when they demand your reports.

The method used to account for insurance claims is the “disposal method”. Any asset subject to an insurance claim should be transferred to a “Disposal Account”. Depreciation on the asset for the relevant period is calculated, and credited to the disposal account with the insurance settlement. The cost, less depreciation equals book value. Any settlement amounts over or under book value, will result in a loss or profit on disposal.

An insurance claim, wrongly entered as “income”, can be adjusted by transferring the amount to the disposal account. After effecting these entries, the disposal account should balance to zero. Your new records would reveal, the loss or profit on claim (income statement), settlement in bank account, fixed assets less the stolen/lost asset, and a lower depreciation estimate for the year.

I acknowledge that this is your accountant’s job, you however have a duty to provide accurate records. But how many businesses continue to pay, the same insurance premiums on the assets, since purchase date, when they, entitled to a lower premium, due to a lower asset value.(prior to any asset losses).

Also, a precarious asset situation in your books, might lead to problems in your tax affairs.

No business can afford a visit from the IRS. Did you know that tax authorities always commence auditing, your assets, before they move on to your income?

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The Importance of Cradle to Grave Reporting to Telecom Communication Managers

The success of a business is often directly related to the health and performance of their communication facilities. Many companies deploy call accounting software to analyze call activity, reconcile invoices, control misuse/abuse and perform corporate roll ups. Traditional call accounting metrics often fail to measure system performance and customer experience.

Cradle to grave logs can be leveraged to harvest more insightful communication information including ring time, transfers, hold time, conference and talk time. These granular statistics allow communication managers to maintain, fine tune or upgrade communication facilities. Most call centers would be oblivious to system bottlenecks, hardware failures and improper call handling without cradle to grave call accounting.

Effective use of cradle to grave reports allows organizations to analyze:

Call Handling – By studying cradle to grave and call history logs, communication managers determine number of transfers, hold time and talk time. These metrics can be traced for every customer contact from the start to the end of a call. This ensures that the handling of all call activity can be examined and verified to meet corporate service level standards.

Quality Assurance – For most businesses, it is imperative that agents adhere to the company gold standards in customer care. An effective cradle to grave solution will provide a mechanism for managers to listen to call recordings and/or voice mails. This will allow them to address customer complaints, fine tune corporate policies and provide additional training to agents.

Workforce Management – Skill set-based cradle to grave and call history reports empower communication managers to track call volumes, geographical distribution, service levels and resolution types. This allows them to monitor efficiency and make informed decisions on staffing requirements during normal business hours, seasonal changes and peak hours.

Hardware Configuration – Reviewing the frequency of abandoned calls, ring time and call lengths can uncover system failures, ineffective hardware configurations and peak hour bottlenecks. This information can be transformed into concrete decisions about hardware performance and migration strategies.

A seasoned unified communication management solution must address the comprehensive needs of communications managers. A robust application that includes cradle to grave analysis, historical call center reporting, call recordings and voice mail playback, real time agent/queue dashboard in addition to traditional call accounting should be deployed (on the desktop or more flexibly in the cloud). The proper monitoring of these metrics will maximize communications technology investments, improve customer satisfaction and increase the bottom line.

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Chartered Accountancy Profession in India and Your Career Prospects

A career in chartered accountancy is for the people who have a penchant for numbers and accounts. The demand of CA’s has been growing in between 10 percent to 15 percent over the last three years and the trend is expected to continue in the coming years.

Chartered accountancy is one of the highest paying careers in the country. It is not only remunerative but is considered to be one of the most respected professions in India. As per the news published in one of the leading newspapers, in ICAI campus placements 952 Chartered accountants were placed with an average annual salary package of around Rs 7.28 lakh. This is a clear indication of high demand for accountancy professionals in the market. ICAI has organized this placement drive across different cities in India like Ahmedabad, Bangalore, Bhubaneswar, Chennai, Coimbatore, Hyderabad, Indore, Jaipur, Kolkata, Mumbai, New Delhi and Pune.

Some of the high-profile recruiters of chartered accountants in India are Reliance Industries, Tata Consultancy Services, Federal Bank, ITC, ICICI Prudential Life Insurance, L&T, Wipro, Bharat Petroleum Corporation, Engineers India, GAIL, etc. Some other good paymasters of CA are E&Y, Deloitte, ICICI Bank and PWC.

Where are the CA jobs available?

As per the current job trends, CA’s are in high demand not only in the core sectors like banking, financial services, or manufacturing but even in new age sectors like Information Technology, telecom, risk and assurance services, infrastructure and retail. High earning potential jobs are available in banks, PSU’s, auditing firms, finance companies, mutual funds, portfolio management, stock broking firms, legal firms and so on and on. Financial inclusion is the next high potential job generating sectors.

The work of a CA is mainly involved in auditing financial reporting, creating and maintaining accounting systems, corporate finance, and tax management, among others. A fresh chartered accountant can earn somewhere in between INR 5 to 7 lakh per annum. With the increase in the years of experience and expertise, the salaries can go as high as INR 18-24 lakh per annum.

Here are the top career options for the chartered accountants, take a look-

· Audit and Taxation

· Finance Advisory

· Investment Banking

· Banking and Financial Services

· Outsourcing

· Academics

· Corporate Sector

Chartered accountants are one of the most rewarding career domains to be in. The courses required are common proficiency test (CPT), Integrated Professional Competence Course (IPCC), CA final and Articleship.The modern age CA is technically armed to serve as management consultants and play a pivotal role in helping business and industry to optimize the use of resources, increase their efficiency and accomplish their targets.

People in this occupation must work strategically and maintain utmost amounts of precision. There is a huge scope for the budding CA’s. To conclude, it would be good to say that CA jobs are financially rewarding and personally gratifying.

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5 Reasons To Get Add-Ons For QuickBooks

With the accelerating growth of an accounting firm, the requirements and demands also increase. QuickBooks is a software that sits fit through all these phases of growth. QuickBooks hosting on the cloud caters to all the accounting needs. However complex or easy the accounting process be, QuickBooks is the right answer to all of it.

When an application or a software is hosted to the cloud, it’s horizons expand and so does it’s functionality. This is where the add-ons come into play. Add-ons are third-party applications, which when integrated with QuickBooks, help in accomplishing an array of tasks like cash and inventory management.

Let’s know how integrating Add-ons with QuickBooks would help in ameliorating your accounting experience:

1. Payment Methods

Its only fair to say that we live in the age of partial payments and attractive EMIs, no one really wants to pay full price upfront or is willing to commit to one single plan for a long duration. Periodic payments are preferred by clients as it helps them budget better and strategize their plans. If you have such clients, then QuickBooks add-ons such as Bill & Pay is the perfect fit for you, it gives you an automated payment feature. It helps in regulating the frequency, fees of the payments being made and also helps out by updating the balance of the invoice in QuickBooks.

2. Stock Management

When we say that QuickBooks is a meticulous software known for its business relativity, we stand by it. But what we also identify is the fact that a little help in the area of inventory management would complement QuickBooks even better. QuickBooks add-ons like Fishbowl Inventory prove to be a game-changer when it comes to inventory management. It provides useful features such as stock tracking by using the serial number, providing worldwide inventory support, along with the pricing history of specific items.

3. Paperless Documentation

As every business in the world is quickly moving towards paperless and electronic methods to save the environment and go green, QuickBooks add-ons act as a catalyst, a pro-support in this entire process while increasing work efficiency. It becomes very easy to store the files and documents when using QuickBooks add-ons. A number of these add-on applications let you complete your task by just having to scan and attach the data with invoices, bills. Going the electronic way of documentation with these QuickBooks add-ons, lets you store all the data in one place, thus making auditing and examining files, an easy task.

4. Employee Management

The team, the employees form the base of any organization. They are the molding pillars for the success of a business. With QuickBooks add-ons, you get the facility of managing the employees with efficient time tracking. From assigning tasks to managing work schedules all of this can be done in a jiffy with add-on apps like Count Me, which makes it very easy to clock the time of the employees. It comes with the added benefit of tracking time even without an internet connection and provides the updates when the system regains connectivity and is online again.

5. Cashflow Forecasting

Having QuickBooks add-ons lets you keep the company’s finances in order. It enables CPAs to be on top of their number and finance game, letting them spear ahead. These add-on apps allow streamlining all the invoices and bills generated from QuickBooks. Integrating add-ons with the QuickBooks, eliminates vestigial hand-operated tasks such as data entry, which in turn increases accuracy in lesser time.

To Sum it Up

QuickBooks is undoubtedly the most exceptional and useful software when it comes to Small and medium businesses. It is brimmed with features and helps in easing out a number of accounting chores. But with sporadic growth of a business, new needs and a lot of changes arise, to accomplice all this, getting Add-ons almost becomes a mandate. QuickBooks Add-ons make an already excellent software, even better. Features like easy expense management, stock tracking, and paperless documentation are features that this rapid pace industry is bound to appreciate.

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The Experience of Financial Markets Regulation in the Southern African Region – Part Two –

The State of Financial Markets in the Southern African Region

Up to the end of 1994, there were 14 stock exchanges in the entire African continent. These were Cairo (Egypt), Casablanca (Morocco), Tunis (Tunisia) in North Africa; Abidjan (Côte d’Ivoire), Accra (Ghana), and Lagos (Nigeria) in West Africa and Nairobi (Kenya) in Eastern Africa. In the Southern African region, they were Windhoeck (Namibia), Gaborone (Botswana), Johannesburg (South Africa), Port Louis (Mauritius), Lusaka (Zambia), Harare (Zimbabwe) and Mbabane (Swaziland). In 2005, most of other countries in Southern Africa have developed their own stocks exchange markets. They are Maputo (Mozambique), Dar-Es-Salam (Tanzania) and Luanda (Angola).

With the exception of the Johannesburg Stock Exchange, and at a different level, the Zimbabwe Stock Exchange and the Namibia Stock Exchange, these markets are too small in comparison to developed markets in Europe and North America, and also to other emerging markets in Asia and Latin America. At the end of 1994 there were about 1150 listed companies in the Africa markets put together. The market capitalization of the listed companies amounted to $240 billion for South Africa and about $25 billion for other African countries.

In the countries under review, stock markets are particularly small in comparison with their economies – with the ratio of market capitalization to GDP averaging 17.3 per cent. The limited supply of securities in the markets and the prevailing buy and hold attitudes of most investors have also contributed to low trading volume and turnover ratio. Turnover is poor with less than 10 percent of market capitalization traded annually on most stock exchanges. The low capitalization, low trading volume and turnover would suggest the embryonic nature of most stock markets in the region.

We have gathered considerable information on the current state of financial markets in Africa in general, and due to a limited time frame, it was not possible to collate, analyze and harmonize them. The format of this article cannot allow to take into consideration all the data. From the latest information, it becomes clear that with the ongoing reforms within the financial sectors in the countries under investigation, a lot of progress has been achieved in terms of regulatory and institutional capacity building. We could expect more results with the promotion of more open investment regulations, allowing more financial flows in the region.

The Experience of Financial Markets Regulation in the Southern African Countries

The financial systems of Southern African countries are characterized by high ownership structure resulting in oligopolistic practices which create privileged access to credit for large companies but limited access to smaller and emerging companies. The regulatory framework must take into account all the specific characteristics of these systems, and at the same time keep the general approach inherent to every regulatory instrument.

Financial systems in Southern Africa are also noted for their marked variations. Some systems, such as those in Mozambique, Angola and Tanzania were for a long period, dominantly government-owned, consisting mostly of the central bank and very few commercial banks. Up to date, Angola has not developed a money and capital market, and the informal money markets are used extensively. Other systems had mixed ownership comprising central banks, public, domestic, private and foreign private financial institutions. These can be further sub-divided into those with rich varieties of institutions such as are found in South Africa, Mauritius and Zimbabwe, and others with limited varieties of institutions as are found in Malawi, Zambia, Swaziland, etc.

Regulatory authorities in most of these countries have, over the years, adopted the policy of financial sector intervention in the hope of promoting economic development. Interest rate controls, directed credit to priority sectors, and securing bank loans at below market interest rates to finance their activities, later turned out to undermine the financial system instead of promoting economic growth.

For example, low lending rates encouraged less productive investments and discouraged savers from holding domestic financial assets. Directed credits to priority sectors often resulted in deliberate defaults on the belief that no court action could be taken against the defaulters. In some cases, subsidized credit hardly ever reached their intended beneficiaries.

There was also tendency to concentrate formal financial institutions in urban areas thereby making it difficult to provide credit to people in the rural areas. In some countries, private sector borrowing was largely crowded-out by public sector borrowing. Small firms often had much difficulty in obtaining funds from formal financial institutions to finance businesses. Finally, the tendency of governments of the region to finance public sector deficits through money creation resulted not only in inflation but also in negative real interest rates on deposits. These factors had adverse consequences for the financial sector. First, savers found it unrewarding to invest in financial assets. Second, it generated capital flight among those unable or unwilling to invest in real assets thereby limiting financial resources that would have been made available for financial intermediation. Coupled with this was the declining inflow of resources to African countries since the 1980s.

A viable financial market can serve to make the financial system more competitive and efficient. Without equity markets, companies have to rely on internal finance through retained earnings. Large and well established enterprises, in particular the local branches of multinationals, are in a privileged position because they can make investments from retained earnings and bank borrowing while new indigenous companies do not have easy access to finance. Without being subjected to the scrutiny of the marketplace, big firms get bigger.

The availability of reliable information would help investors to make comparisons of the performance and long term prospects of companies; corporations to make better investments and strategic decisions; and provide better statistics for economic policy makers. Although efficient equity markets force corporations to compete on an equal basis for the funds of investors, they can be blamed for favouring large firms, suffer from high volatility, and focus on short term financial return rather than long-term economic return.

In various countries where domestic bond markets exist, these are generally dominated by government treasury funding which crowds out the private sector needs for fixed interest rate funding. With minor exceptions, the international fixed rate bond markets have been closed to African corporations. Thus the development of an active market for equities could provide an alternative to the banking system.

The development of financial markets could help to strengthen corporate capital structure and efficient and competitive financial system. The capital structure of firms in Southern African countries where there are no viable equity markets are generally characterized by heavy reliance on internal finance and bank borrowings which tend to raise the debt/equity ratios. The undercapitalization of firms with high debt/equity ratios tends to lower the viability and solvency of both the corporate sector and the banking system especially during economic downturn.

Case studies in selected countries of Southern Africa

In all countries under study, both the historical background, the level of financial system development and the importance of financial markets structure and operations have considerably affected the nature of the regulatory framework. However, there are few countries whose objectives of financial market liberalization were the basis for the development of a modern regulatory system. Mauritius and Botswana are examples which, together with South Africa and Zimbabwe, have developed some of the most developed and diversified financial markets systems in Sub-Saharan Africa. There is no doubt that economic and financial conditions of the economies of individual Southern African countries have played significant roles in shaping their financial market’s regulatory framework.

1. Financial Markets in Botswana

An informal stock market was established in 1989, managed and operated by a private stockbroking firm (Stockbrokers Botswana limited). In 1995, a formal stock exchange was established under the Botswana Stock Exchange Act. The BSE performed remarkably well in terms of the level of capitalization, the value of the shares and the returns to the shares. The BSE contributed to the promotion of Botswana as a destination for international investment.

In 2004, the number of domestic companies listed was 18 while foreign companies listed were 7, and two in the venture capital market. The Bank of Botswana introduced its own paper, BoBCs, since 1991, for liquidity management purposes, and there is a growing secondary market for the instrument. In 1999, the Central Bank introduced an other instruments, the Repos (Re-purchase Agreements) and the National Saving Certificates with the objective to develop local money market and to encouraging savings. In 1998, the International financial Services Centre (IFSC) was established to promote world quality financial services.

2. Financial Markets in Mauritius

The Government of Mauritius has decided as a priority, to modernize and upgrading the financial system of Mauritius and recently took measures to strengthen the financial sector and to further integrate it with both the domestic economy and the global financial market.

Thanks to a well developed network of commercial domestic banks, offshore banks, non financial institutions and financial institutions, the financial system is one of the most vibrant in the Southern African region.

The Stock Exchange of Mauritius (SEM) started its operations in 1989, with only five listed companies. In 2004, more than 44 companies were listed, and the range of activities has expanded, state-of-art technology is being used in the dealings.

In September 2001, the settlement cycle on the SEM was reduced from five to three days, to be in line with major international stock markets. The short settlement cycle has since helped to improve liquidity and turnover on the market as investors are able to sell their securities three business days after buying the, thus reducing risks and bringing better integration to global markets through strict adherence to international standards.

3. Financial Markets in Mozambique

In 1978, all private banks operating in Mozambique were nationalized and merged into two state owned institutions, the Banco de Moçambique (Central Bank) and the Banco Popular de Desenvolvimento (BPD). After the adoption of a new economic orientation in 1992, the Government implemented an economic reform programme including the financial sector reform. Foreign banks were allowed to invest in Mozambique and the regulatory and commercial activities of the Central Bank BDM were separated. Banco de Moçambique assumed the Central Bank function while Banco Comercial de Moçambique BCM led the commercial banking sector.

The financial sector liberalisation policy allowed new institutions. Apart from the already operating Standard Bank, new banks licensed since 1992 or resulting from liquidation of existing institutions include the Banco Internacional de Moçambique, the Banco Comercial de investimentos, Banco de Fomento, Banco Austral, African Banking Corporation ABC, BMI, UCB, ICB, Novo Banco, etc. There are also investment banks, leasing companies and credit cooperatives. This increased number of financial and non financial institutions resulted in the development of an active financial sector.

In October 1999, the stock market of Mozambique (Bolsa de Valores de Moçambique BVM) was inaugurated. Its regulatory agency is the Central Bank BDM and its operations are still limited. With the technical support of the Johannesburg Securities Exchange JSE and the Lisbon Stock Exchange, plans are underway to develop an international financial services centre, including a state-of-the art information technology system.

4. Financial Markets in Namibia

The Namibian Stock exchange NSX is governed by the Stock Exchange Control Act of 1985. Amendments to the Act have been recently adopted in order to bring the national laws in line with international standards.

The NSX was established in October 1992 and is the most technically advanced bourses in Africa, and also one of few self regulated financial markets in Southern Africa. The Namibian Stock exchange Association, a self regulatory, non profit organization, is the custodian of the license to operate the NSX. It approves listing applications, licenses stockbrokers and operates the trading, clearing and settlement of the exchange. Since 1998, the NSX has used the most technically advanced management tools available on the continent, which enable better surveillance and detailed client protection.

5. Financial Markets in South Africa

The South African Financial Markets system is the most sophisticated and complex with the vibrant Johannesburg Securities Exchange (JSE), the Bond Exchange of South Africa (BESA) and the and the South Africa Futures Exchange (SAFEX).

The Johannesburg Stock Exchange JSE was established in November 1887. Currently, it is governed by the Stock Exchanges Control Act of 1985 [amended in 1998 and 2001]. The JSE is the largest stock exchange in Africa and has a market capitalization of more than 10 times that of all the other African markets combined. The JSE provides technical support and capacity building, skills and information to the following exchanges in the region: Namibia, Mozambique, Mauritius, Tanzania and others in Africa (Nigeria, Ghana, Egypt, Uganda and Kenya). Since 1999, the JSE harmonized its listing requirements with the stock markets of Botswana, Malawi, Namibia, Zambia and Zimbabwe.

The BESA was licensed in may 1996 under the Financial Markets Control Act of 1989 [amended in 1998], and the SAFEX was established in 2001 as a Financial Derivatives Market and agricultural Products division of the JSE.

In June 1996, the JSE introduced the fully automatic electronic trading system known as Johannesburg Equities Trading (JET) and since May 2002, is using the Stock Exchange Trading System (SETS).

6. Financial Markets in Swaziland

The Swaziland Stock Market (SSX) was established in 1990 to promote local investment opportunities. In 2002, five companies were listed. The SSX has developed new listing requirements in line with new international regulatory standards. A new security Bill has been approved in 2002, and should be in force by now. It will allow the licensing and regulation of all securities markets, operations and participants.

7. Financial Markets in Tanzania

The Dar-Es-Salaam Stock Exchange (DSE) was incorporated in September 1996 under the Capital Markets and Securities Act of 1994. Its operations however did not start until April 1998 with the listing of the first company. In October 2002, foreign companies were allowed to operate on the DSE. Its regulatory agency is the Capital markets and securities Authority (CMSA). Plans are underway to facilitate the securing of increased financial resources from global markets.

8. Financial Markets in Zambia

The Lusaka Stock Exchange (LuSE) was created in February 1994 under the 1993 securities Act. It is controlled by the Securities and Exchanges Commission (SEC). Its operations were boosted by the successful issue of the Zambian Breweries, which raised up to US $ 8.5 million to refinance a loan secured for the acquisition of the Northern Breweries in 1998. Most of the listings were the result of the country’s privatization program.

A Commodity Exchange, the Agricultural Credit Exchange was also established in 1994, as an initiative of the Zambia National Farmers’ Union, after the liberalization of the prices of agricultural commodities. The Exchange provides a centralized trading facility for buyers and sellers of commodities and inputs. It provides also updated prices and some market information for both local and international markets.

9. Financial Markets in Zimbabwe

The Zimbabwe Stock Exchange ZSE, is one of the oldest and most vibrant stock exchanges in Africa. It was established in 1890, but had sporadic trading until 1946. In 2002, it had 76 listed companies. The ZSE operates under the Stock exchanges act, which is being amended to take into consideration new technological requirements and to align its contents with international standards (improve the security of share trading, transparency, central depository system, etc.).

The ZSE is open to foreign investors, who can purchase up to 40 percent of the equity of listed company, a single investor can purchase a maximum of 10 percent of the shares on offer. Foreign investors can invest on the local money market up to a maximum of 25 percent per primary issue of government bonds and stocks, and a single investor can acquire a maximum of 5 percent. Foreign investors are however not allowed to purchase from the secondary market. These investments qualify for 100 percent dividend and interest remittance.

Financial Markets Regulation in Southern Africa: which way ahead ?

The major issue in financial market regulation lies in the fact that the legal and institutional framework of most countries is still inadequate to support modern financial processes. Examples of such inadequacy include outdated legal systems leading to poor enforcement of laws. The following challenges are very interesting for further research opportunities.

A cohesive and comprehensive legal framework is required under the proactive approach in order to use the contracts that clearly define the rights and obligations of all intervening operators. Such a framework should encourage discipline and timely enforcement of contracts, fostering responsibility and prudent behavior on both sides of the financial transactions. Prudent and efficient financial intermediation cannot operate without reliable information on borrowers, and some legislation on accounting and auditing standards, which also ensures honesty on the part of financial institutions, Similarly, for a country’s financial markets to develop and operate efficiently, legislation should fully incorporate rules of trading, intermediation, information disclosure, take-overs and mergers.

Because of the role of financial institutions and markets in the development of a sound financial system, additional legislation is normally needed for their operations to complement company law. These are prudential regulations, especially for banks and similar financial institutions that hold an important part of the money supply, create money and intermediate between savings and investment. Company law is an example of the kind of legislation needed. It not only governs the operations of business enterprises but also protects the interests of company stakeholders. Thus, public disclosure of information on the company’s activities should be made mandatory on company management in the appropriate section of the Companies Act. Such information, especially that relating to finance and accounting, should also be statutorily required to be subsequently verified and attested to by auditors.

Prudential regulations cover such issues as criteria for entry (listings), capital adequacy standard, asset diversification, limits on loans to individuals, permissible range of activities, asset classification and provisioning, portfolio concentration and enforcement powers, special accounting, auditing and disclosure standards adapted to the needs of the banks to ensure timely availability of accurate financial information and transparency. The objective is to enhance the safety and soundness of the financial system.

There is real need for an important legislation relating to financial markets which require not only favorable policies but also legal and institutional infrastructure to support their operations, prevent abuses and protect investors. Investors’ confidence is critical to the development of the markets. Brokers, underwriters, and other intermediaries who operate in these markets therefore have to follow laid down professional codes of conduct embodied in the legislation applicable to such institutions as finance and insurance companies, mutual funds and pension funds.

An other important issue is the independence of regulatory authority, their number and the option to establish self-regulatory agency. All these aspects should take into account the objectives and principles defined by the government, and also the specific development needs in the financial system.

A major challenge concerning the Financial Markets in the Southern African region is the harmonization of the national financial regulation and the compliance with international requirements, including the SADC criteria and the international standards set by international organizations such as the International Organization of securities Commissions (IOSCO), the International Accounting Standards Committee (IASC), the Basel Committee on Banking Supervision (BCBS) and the obligations resulting from the WTO Agreement on financial Services (GATS). These key international instruments are starting to be enforced and individual countries have to keep updating their financial markets regulations and upgrade the technical skills of their staff in charge of regulatory and supervisory operations.


-Faure, A.P. An overview of the South African Financial System, in the Securities Markets, Johanesbourg, Securities Research, No.3, 1987

-Dougall, H.E. [1970], Capital Markets and Institutions, Second Edition, New Jersey, Prentice Hall ;

-Furness, E.L. [1972] An introduction to Financial Economics, Heinenmann, London.

-Smith, P.F. [1971], Economics of Financial Institutions and Markets, Illinois, Irwin;

-Peltier, F. [1997] Marchés Financiers et Droit Commun, Banque Editeur, Paris ;

-Kolb W. R, and Rodriguez J .R. [1996], Financial Institutions and Markets, 2nd Edition, Blackwell Publishers ;

-Mattout, J. P. [1996] Droit Bancaire International, Banque Editeur, 2e Edition, Paris;

-Schmidt R H and Wrinkler A. [1999], Building Financial Institutions in Developing countries, Working Paper Series, Finance and Development no. 45, JW Goethe University, Frankfurt am Main ;

-Falkena H. Bamber R. Llewellyn D. and Store T. [2001], Financial Regulation in South Africa, SA Financial Sector Forum, 2nd Edition, Rivonia ;

-Mishkin, F. S. [2004] , The Economics of Money, Banking and financial Markets, Seventh Edition, Addison-Wesley, Boston, MA

-Fanelli`J.M. and Medhora R. [1998] , Financial Reform in Developing Countries, IDRC Mac Millan Press Ltd, Hampshire ;

-Banco de Mozambique [2005] , Annual Report, May 2005.

-SADC [2004], The official SADC Trade, Industry and Investment Review, 8th Edition, SADC Secretariat, Gaborone ;

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Innovative Capitalization: Pondering Policy Implications of the Public-Private Partnership Model

Innovative Capitalization: Pondering Policy Implications of the Public Private Partnership Model

One of the most innovative funding strategies is the Public-Private Partnership (P3) model. The Public-Private Partnership is quickly becoming the future for most infrastructure projects. The Public-Private Partnership is a contractual arrangement between a public agency (federal, state or local) and a private sector entity. Through the derivative agreement, the skills and assets of each sector (public and private) are shared in delivering goods, services or facilities for the use of the general public efficiently and effectively. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the good, service or facility. Given current government fiscal and budget crises, viable funding options are being evaluated for building and renovating infrastructures using small amounts of money from governments or non-governmental organizations. Often, the Public-Private Partnership can be the solution to financing problems, completion of jobs and investing in large projects without sacrificing the government limited financial resources. There is significant and growing empirical evidence that Public-Private Partnership projects come in substantially lower than their initial estimated cost making them very attractive and preferred funding option for many organizations.

The assistance of competent financial advisers may be required. Often, financial advisers’ executive portfolio includes designing and deploying sound financial accounting system with strong internal controls. Further, they may assist in formulating company-wide financial objectives, policies, procedures, and processes to assure all stakeholders of a continuously sound and transparent financial accounting structure.

Moreover, financial advisers may design and execute fraud detection and mitigation strategies. Their assignments may deal with key aspects of fraud examination including fraud detection, deterrence and prevention, internal controls, auditing and investigation techniques, pertinent law and evidence, and fraud schemes involving business-to-business, corporate and personal financing, financial institutions, healthcare, insurance, intellectual property, and securities.

Finally, financial advisers employ managerial economic techniques to mitigate moral hazards and adverse selection for insurance and re-insurance portfolios and corporate clients. Drawing on strategic linkages to pertinent aspects of interdisciplinary competencies in managerial (cost) accounting, managerial economics, managerial finance, business methods, information technology, criminal justice, and law enforcement they formulate appropriate corporate financial management strategies that mitigate financial loss, protect and preserve financial assets.

However, what keeps financial advisers awake at night and occupy most of their professional time are not the objectives of internal control-assuring achievement of an organization’s objectives in operational efficiency and effectiveness, reliable financial reporting, and compliance with pertinent laws, regulations and policies or elements of internal control-control environment, risk assessment, control activities, information and communication, and monitoring but identifying appropriate sources of funds for the enterprise and corporate clients particularly governments and non-governmental organizations.

There are several types of Public-Private Partnerships, depending on the needs, options available and the size of the project being considered. Based on available meta-data and meta-analysis, the most suited public projects to be executed using Public-Private Partnerships are power generator projects and infrastructure projects. The most frequently used formats are: Traditional-Under this funding strategy, the public component of the partnership acts as a contracting officer; look for funding, and has the overall control over the project and its assets; Operation and Maintenance-Under this funding strategy, the private component of the partnership operates and maintains the installation of the project, while the public agency acts as the owner of the project; Design and Build-Under this funding strategy, the private partner designs and builds the facility; while the public partner provides the funds for the project, and has control over the possession and assets generated by the project; Design-Build-Operate-Under this funding strategy, the private partner designs, builds, and operates the facility or project. The public partner acts as the owner of the installation and gets the fund for construction and operation; Design-Build-Finance-Operate-Under this funding strategy, the private sector provides finance, design, build, possess and operates the project, while the public partner only provides funding while the project is being used or active; Design-Build-Operate-Transfer-Under this funding strategy, the private partner designs, builds, and operates, for a limited time the project, and after that specific period of time, the facility is transferred to the public partner.

Others include, Build-Transfer-Operate-Under this funding strategy, the private partner builds and transfers the project to the corresponding public partner. Afterward, the public partner chooses to lease the operation of the facility to the private sector, under a long-term leasing agreement; Build-Own-Operate-Transfer-Under this funding strategy, the public partner builds, possess and operate the project for a limited time, until some time when the installation is transferred, free of charge, including ownership to the private agency; Lease-Under this funding strategy, the public owner leases the facility to a private firm. The private company must operate and will provide maintenance for the facility per specified terms, including additions or remodeling process; Concession-Under this funding strategy, the public agency will be partnering with a private company, conceding all exclusive rights to operate, maintain for a specific period of time, under specific contract terms. The public partner will have the power over the ownership, but the private partner will possess owner rights over any addition incurred while being operated under its domain; Divestiture-Under this funding strategy, the public partner will make a complete or partial transference of the installation to the private sector. The government might include specific clauses in the sales agreement requiring investment and modernizations on the facility, and continuation of the services being provided.

As in all business decisions, there are costs and benefits associated with all capitalization strategies. Financial advisers assist their clients to isolate and weigh the costs and benefits of each funding strategy. And recommend the funding option that provides the maximum net benefit pursuant to the stipulated evaluation criteria. In the next article we will examine some keys to successful Public-Private Partnerships considered as best industry practices.

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SMSF Auditor – Do You Need to Have Your SMSF Audited?

The federal government intends to look at the Cooper Review recommendation on SMSF auditor autonomy to determine whether or not alterations are needed to the current standards. Leon Yap delivers tremendous experience auditing across several legislative frameworks and is an accredited professional SMSF auditor. A good solid Self Managed Super Fund is necessary to be audited by your Recognized SMSF Auditor.

Self Managed Superannuation Funds (SMSFs) have been capable to buy property, when it is in accordance with ones own investment system, although not many of them meet the expense of to due to the fact until September 2007 they could never borrow. The Superannuation Industry Supervision Act 1993 demands trustees of the SMSF to be able to have their particular fund audited each year by an licensed smsf auditor. Just about all superannuation funds usually are necessary to appoint trustees.

The ATO’ s SMSF Announcement gives regular information and facts for trustees connected with self managed super funds, income tax agents, authorized auditors, financial planners and also administrators around key regulatory and administrative topics, and also any kind of essential advancements of great interest with the industry. Due to the laws around super funds, they can be dealt with quite diversely pertaining to lending purposes. In order to be eligible to tax concessions available to complying funds, a self managed fund must satisfy selected residency conditions and be viewed as a resident regulated fund all the time within the income yr.

An in-house asset is really a loan to, a great investment in, or perhaps a lease with, an associated party of your fund, or even an investment within a connected trust of the fund. Normally, being a trustee you can be restricted from loaning to, investing in or perhaps leasing to a associated party of the fund more than 5% of the fund’s total assets.

The SMSF can also be necessary to be audited by a great Authorized SMSF Auditor. Furthermore, the increased concentration on important problems such as auditor independence and SMSF auditor proficiency requirements has heightened the interest being paid to SMSF auditors along with the robustness with the audit that they conduct for your SMSF. The SMSF Audit Firm audit organization not only eliminates any independence issues yet also enhances your entire SMSF service offering to your current clients by partnering through an market prominent expert SMSF service provider.

In certain cases it might be organized for the SMSF Audit Firm auditor to call at your practice either to talk about our own services or conduct the audits.

The service is definitely very dissimilar to the common “once a year” service that a lot of clientele of the accounting practice are generally use to. We are able to offer a whole system including audit or perhaps you may wish to conduct the audit.

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