Colonisation and accounting development in Sub-Saharan Africa

Tawiah, Vincent; Oyewo, Babajide Michael; Doorgakunt, Lakshi Devi Boolaky; Zakari, Abdulrasheed Article Colonisation and accounting development in Sub-Saharan Africa Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Tawiah, Vincent; Oyewo, Babajide Michael; Doorgakunt, Lakshi Devi Boolaky; Zakari, Abdulrasheed (2022) : Colonisation and accounting development in Sub-Saharan Africa, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 9, Iss. 1, pp. 1-18, https://doi.org/10.1080/23311975.2022.2087465 This Version is available at: https://hdl.handle.net/10419/288936 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. Published online: 15 Jun 2022. Submit your article to this journal Article views: 3572 View related articles View Crossmark data Citing articles: 1 View citing articles ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS | RESEARCH ARTICLE Colonisation and accounting development in Sub-Saharan Africa Vincent Tawiah 1 *, Babajide Michael Oyewo 2 , Lakshi Devi Boolaky Doorgakunt 3 and Abdulrasheed Zakari 4 Abstract: Sub-Saharan Africa (SSA) was colonised for about a century by the British, French and other European countries. Therefore, we examine these forms of colonisation on accounting development in Africa. We use a description-explanatory approach to show how three forms of colonisation have driven the development of accounting in Africa during and post-colonisation era. This paper defines driving forces during the colonisation period as ex-ante driving forces, and after independence, as ex-post driving forces. We identify among the ex-ante driving forces, governance, economic policy, education and language influenced accounting systems/practices, and they are still predominant. Regarding the ex-post, we found four ex-post driving forces that impact accounting in SSA, which supports the instrumental form of accounting colonisation. These four driving forces are foreign aid, foreign trade liberalisation, membership in international associations and prevalence of foreign ownership. This paper provides insights into how accounting practices have evolved in Africa and how colonisation has driven different accounting systems across the continent. Unlike prior studies, which are limited to pre or post-colonial eras, we provide an understanding of accounting development during the colonial and post-colonial era. Therefore, we demonstrate how colonisation still influences accounting development even after independence in many African countries. Subjects: Accounting; Accounting History; Financial Accounting; International Accounting Keywords: Accounting; colonisation; Sub-Saharan Africa; colonisers’ driving forces 1. Introduction Since its discovery, Africa has been under the significant influence of European countries through direct colonisation (Falola, 2004) and neo-colonisation (Rao, 2000). However, Annisette (2006) suggests that research on accounting history in Africa, in general, is very limited, except for the works of Ezzamel (2002) on Egypt; Carnegie and Potter (2000) on Anglo-Saxon accounting history in ex-colonies. Briston (1978) argues that colonial inheritance is a major explanatory variable for the general financial reporting system in many countries outside Europe. Nobes (1998) argues that former colonies are very likely to use their ex-colonisers’ accounting system, although this system is inappropriate for their current needs (see also, Hove, 1986). In effect, different colonisers used different key strategic driving forces (hereunder driving forces) to implant their accounting systems during the colonial epoch. After independence, former colonies were still connected to their colonising powers and are now constrained by similar forces prevailing during colonisation. These forces are in the form of pressures Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 1 of 18 Received: 14 April 2022 Accepted: 04 June 2022 *Corresponding author: Vincent Tawiah, Dublin City University, Glasnevin, Dublin, Ireland E-mail: [email protected] Reviewing editor: Collins G. Ntim, University of Southampton, UNITED KINGDOM Additional information is available at the end of the article © 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. from donor bodies, international associations, and institutions. The support from World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO) (known as the unholy trinity by Peet, 2009) on trade and finance has enabled formal colonial masters to maintain political influence in developing countries (Rao, 2000). For example, Judge et al. (2010) contend that the World Bank and the IMF influence developing countries (ex-colonies) to adopt international accounting standards. However, many colonies such as South Africa, Nigeria, and Ghana claim to have developed new driving forces for accounting in the form of new regulatory frameworks and review of the accounting education system after they were decolonised but scrutinising these frameworks confirms that many have mainly emulated what their ex-colonisers are doing. Similarly, some countries, including Sudan, Egypt, Tunisia, Libya and Algeria (mainly Islamic jurisdictions), are reverting to their practice beliefs of Islamic accounting, thus weaning away the colonisers’ accounting systems. This paper defines driving forces during the colonisation period as ex-ante driving forces and after independence as ex-post driving forces. It then identifies the driving forces and conducts an ex-ante and an ex-post investigation to determine their impact on accounting. We develop a theoretical framework for this study considering (i) the governance systems (co-optation and absolute subjugation), (ii) three forms of accounting colonisation (coercive, instrumental and discursive), and (iii) the expected responses of the colonised to the colonisers’ driving forces. We use a description-explanatory approach to document the laws affecting accounting and construe the different types of accounting colonisation (Briston, 1978). We extend and update the literature on the history of accounting in Africa (Boolaky & Jallow, 2008; Boolaky et al., 2018) by providing insights into how colonisation has shaped accounting practices in the continent. Unlike prior studies, which are limited to pre or colonial eras, we provide an understanding of accounting development during the colonial and post-colonial eras. Therefore, we demonstrate how colonisation still influences accounting development in Africa even after independence. The rest of the paper is organised as follows. Section 2.0 presents the research methods. Section 3 traces accounting practices in Africa before colonisation. Section 4.0 is on modes of accounting colonisation. Section 5.0 discusses the ex-ante driving forces. Section 6.0. presents the ex-post driving and the paper concludes in section 7.0. 2. Research methods Consistent with prior studies (Briston, 1978; Saunders et al., 2019), we adopt a descriptiveexplanatory approach. This research approach involves a description of phenomena and an explanation of why the phenomena work in a particular way (Saunders et al., 2019). Given the lack of data on some issues, we use different sources to generate sufficient appropriate evidence for our findings in this study. We, therefore, proceeded as follows. First, we used archival data by accessing archives of a few African countries (in Mauritius, Madagascar, Mozambique, and Ghana) and other secondary data published by the World Bank, International Financial Statistics, IFAC and WTO, and Reports from the Association of Chartered Certified Accountants (ACCA), ICAEW, CIMA, World Economic Forum, Deloitte IAS Plus (see, Boolaky, 2004; Briston, 1978).To determine the domestic accounting standards used in countries, we sighted a random sample of firms’ balance sheets and income statements during the period. We accessed these documents through the registrar of the company’s office. 3. Tracing accounting practices in Africa before colonisation Annisette (2006) argues that many pre-colonial African societies had features of modern economic activities such as taxation, accounting, money, tariff system, and even cosmopolitan commercial centres before colonialisation. For example, the Land of Gold (Ghana), Timbuktu (Mali), and Songhai (Niger and Burkina Faso) were doing commerce (Diop, 1987; Okafor, 1997). Diop (1987) further argues that Timbuktu (Mali) was well-known in Asia and Europe for its important centres for international trade and commerce, whereas the Land of Gold (Ghana) had in place good Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 2 of 18 administrative and tax systems. Timbuktu commonly used the practice that any debt should be in writing, like debt covenant nowadays. The Axumite Kingdom, one of the most prominent trading hubs in the pre-colonial era, also practices some form of accounting system. Indeed, the kingdom is noted for being the first to mint coins as currency in Africa (Pankhrust, 1965, p. 2002). Largely trade between this the Axumite Kingdom and the Mediterranean countries was done in coins, and these transactions required book-keeping (Rena, 2005). The use of Axum coins and its related documentation is believed to be the beginning of banking and accounting systems in East Africa (Rena, 2007) Extant literature in anthropology also provides evidence of financial systems and practices in ancient Africa (Bascon, 1952; Nwabughugu, 1984). These authors refer to a practice called “esusu” which originated in Africa. Esusu is a financial system whereby a number of people pool a fixed amount of money to a common fund for an agreed period (Bascon, 1952). For instance, each member who joins the fund contributes $10 monthly for a year. Then every month, each member, in turn, receives $120 (if there are 12 members) as agreed until the 12 th month, where each member will receive the amount contributed, and the cycle is complete. In this system, an Esusu Leader will organise and manage the fund (that is, keep a record of members, their contributions, and all the pay-outs). While there were no clear-cut accounting principles, it is logical to believe that the leader keeps proper accounts and reports to members periodically. This indicates the presence of accounting during that era. This practice is equivalent to modern mutual finance commonly practised under different names in many other parts of the globe, such as Madagascar, Mauritius, Seychelles, Mozambique, the Caribbean, and Ghana. The above examples indicate that most African societies and kingdoms had well-functioning accounting systems that could have been developed further to suit the continent. However, when the colonisers penetrated Africa, they imposed their own systems and practices on the Africans using different forces and suppressed them from their own systems and practices where community trust and faith were prevalent. The colonisers made it appear that the existing systems were inferior and hence abolished them. For instance, on arrival in Eretria, the Italians replaced the existing coins with their own currency called the lire (Rena, 2007). Given the long years the colonisers spent in Africa, most societies forgot about their system in the pre-colonial era. Hence they adapt to what the colonisers left behind. The colonial mentality and the lack of expertise have hindered the development of the pre-colonial accounting system even after independence. Another reason why some of the well-function African origin systems could not develop further is globalisation. As the countries open up and embrace the culture of a global village, accounting systems across nations turn to mimic each other for easy cross border trade and investment. In effect, accounting has become both an instrument and an object in globalisation (Hopper et al., 2017). Prior studies also suggest that it is cheaper and more beneficial to adopt existing superior systems such as IFRS from the Western countries than to develop own system (Tawiah, 2019; Tawiah & Boolaky, 2019) 4. Mode of accounting colonization Alam et al. (2004) argue that it is difficult to theorise and generalise colonialism because the models, strategies, and practices of colonialism have differed from time to time and place. However, Said (1993) defines colonialism as the implantation of settlements on a distant territory. Broadbent and Laughlin (1997) posit that accounting colonisation occurs when changes to accounting are a force through changes in values and culture. Extending on Broadbent and Laughlin’s (1997) definition of accounting colonisation, Oakes and Berry (2009) contend that it can take place in three modes; (i) coercive, (ii) instrumental and (iii) discursive colonisation. Figure 1.0 present mode of accounting colonization and the potential responses from ex-clonisers Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 3 of 18 Coercive colonisation occurs where controllers (colonisers) realise their intentions or objectives through enforced practices. This may entail two behavioural responses: mock obedience or real obedience. Mock obedience implies that ideologies of the colonised may remain unaltered, and the intentions of the colonisers are enacted by the colonised. Real obedience is that the ideologies of the colonised may change due to the inexorable imposition of coercive practices. In the context of this study, there are ex-colonies that have enacted the colonisers’ intentions, but their original ideologies have not changed. This is true in the Arabic World and other Islamic jurisdictions (Sudan, Egypt, Tunisia, and Algeria) that have reverted to the Islamic Accounting and Finance systems and practices. 1 However, some are still following the accounting proposed by their excolonisers but under different names such as OCAM, 2 OHADA, and UDEAC. 3 For example, the OCAM Accounting Plan and UDEAC Accounting Plan are mainly simplified versions of the French Accounting Plan 1947. This argument is echoed by the narrative study conducted by Elad and Tumnde (2009) on the accounting system of the OHADA countries in Africa. They contend that there are similarities between the book-keeping provisions of the Salary Code 1673, Code of Commerce 1807 and the OHADA Uniform Act on Accounting 2000. Elad’s (2015) follow up studies also revealed that despite the persistent pressure of the World Bank and IMF for large entities to adopt IFRS, some Africa Franc Zone countries’ financial accounting practices are still modelled on the long-established French traditions. Colonisers have imposed their own systems and practices. For example, French colonisers used the Napoleonic Commercial Code 1807 (also called Commercial Code or Code of Commerce in some colonies) to enforce their rule-based Accounting Plan. This was common across all the ex-French colonies in Sub-Saharan Africa (SSA) and other ex-French colonies in the rest of the world. Some colonies have adopted the colonisers’ intention due to fear of sanctions, especially where governance was of an absolute-subjugation type. Nowadays, the scenario has changed. Some developing countries, including ex-colonies, adopt accounting systems and practices due to fear of sanctions from international funding agencies or authoritative bodies. A typical example in Africa is that countries in OHADA must comply with the Uniform Act on Accounting, and failure could lure to sanctions for non-compliance from UMEC (Elad, 2015). Some other countries adopt IFRS due to pressure from the World Bank (Judge et al., 2010) or their affiliation with the International Federation of Accountants IFAC or World Trade Organisation (WTO). Instrumental colonisation occurs when the colonisers realise their intentions or objectives using incentives, persuasion, bribery, and propaganda. This type of colonisation may entice two types of obedience/compliance, viz: devious compliance or dialogic compliance. Devious compliance means that changes to ideologies of the colonised are unlikely, despite support being expressed and instructions enacted. Dialogic compliance means that the colonised accept many changes to ideologies, and instructions are enacted and realised by bribery and incentives. In this perspective, Bakre (2009) contends that colonisers, mainly British, offered education as an incentive to the sons of Chiefs because colonisers considered them to have the power to maintain the colonial systems and practices, including accounting. Arguably instrumental colonisation was practised through other incentives such as conditions for promotion at work. Anecdotal evidence suggests that many civil servants were promoted to top-level because of propagating and supporting colonisers’ intentions and instructions. The instrumental cololnialisation is common among the British excolonies, particularly those in West Africa. Discursive colonisation occurs where the colonisers realise their intentions through processes of social discourse, and with this approach, colonisation is accepted by most colonised. Like the two fore-mentioned types of colonisation, discursive colonisation also leads to two types of behavioural responses, viz: discursively pathological and discursively benign. Discursively pathological means the degree of social discourse may contain hidden agenda, and therefore the risk of undesirable forms of ideological power may be implicated. Discursively benign arises from extensions to democratic processes. With discursively benign, the colonial masters start with the negative impact of the policy but stress more on the positive side Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 4 of 18 Table 1. List of SSA countries/colonisation/accounting standards/independence Members Colonisation Legal Systems Independence Date Angola Portugal Portuguese Civil law 1975 Benin French French Civil Law 1960 Botswana British Roman-Dutch Law 1966 Burkina Faso French French Civil Law 1960 Burundi French German-Belgium law 1960 CAR French French Civil Law 1960 Cameroon French French Civil Law 1960 Chad French French Civil Law 1960 Cape Verde Portugal Portugal Civil Law 1960 Comoros French French/English Law 1975 Congo French German Belgium Law 1960 Côte D’Ivoire French French Civil Law 1960 Djibouti French French Civil Law 1977 Ethiopia Italy Federal Law/Islamic 1941 Gabon French French Civil Law 1960 Gambia British English/Islamic Law 1965 Ghana British English Common Law 1957 Guinea French French Civil Law 1958 Guinea Bissau French N/A 1975 Kenya British English/Islamic Law 1963 Liberia United States English Common Law 1847** Lesotho British Roman Dutch/English Law 1966 Madagascar French French Civil Law 1960 Mali French French Civil Law 1960 Malawi British English Common Law 1964 Mauritius British French/English Law 1968 Mauritania French French/Islamic Law 1960 Mozambique Portugal Portugal Civil Law 1975 Namibia German Roman Based Law 1990 Niger French French Civil Law 1960 Nigeria British English/Islamic law 1960 Rwanda Belgium German/Belgium Civil Law 1962 Réunion French French Civil Law French Dependent Senegal French French Civil Law 1960 Sierra Leone British English Common Law 1961 Seychelles British English/French Law 1961 Somalia Italian Islamic Law 1960 Sudan British English/Islamic Law 1956 Swaziland British Roman/Dutch/Tradition Law 1968 South Africa British Roman Dutch Law 1934, 1994* Tanzania British English Common Law 1961 Togo British French Civil Law 1960 Uganda British English Common Law 1962 (Continued) Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 5 of 18 5. Ex-ante driving forces on accounting Colonisation in SSA began in 1881 and lasted until 1981, though a few colonies obtained independence in the 1960s. Table 1 (column 5) details how each of the forty-five SSA countries obtained independence. Colonisers were British, French and other Europeans. The strategies of the French influenced the other European colonisers. They used the law(s) and similar economic policies to influence the colonies (Meredith, 2005). For example, Spain, Portugal, and Belgium used the French Code of Commerce 1807 as accounting law and closed trade policies and punitive taxes on businesses in their colonies. The colonisers adopted a “divide and rule principle in all the colonies” (Posner et al., 2010). But this entailed conflict across race, gender, and a class of the total population. Arguably, with a similar conflict, only those with the strongest power were able to influence systems and practices. The colonisers, having dominant power, imposed their finance and accounting systems and practices over the colonised own systems and practices (Berry & Holzer, 1993; Boolaky & Jallow, 2008; Hove, 1986). They turned down the degree of trust prevalent among the Africans during these times. 5.1. Accounting law(s) and standards British colonies were following the British Companies Act 4 1862 and 1948. They followed the provisions of the Act, which relates to accounts of companies (there was no evidence on accounting by sole trader and partnership). Section 123–163 of the Companies Act 1948 deals with accounts and audits. Companies were required to keep records of transactions such as stock and cash records, maintain effective controls, and prepare accounts according to the generally accepted accounting principles (Companies Act 1976) and have them audited as prescribed in this Act. Although the UK has revised its own Companies Act since then, the colonies did not necessarily follow the same path but decided to rely on the old Acts. The UK generally accepted accounting principles used during colonisation and even for long after independence. Non-British colonies were following the Code of Commerce, similar to the Commercial Code of 1807. Section 8–17 deals with accounts and audits of businesses. Unlike the Companies Act(s), the Commercial Code applied to all businesses, including sole traders and partnerships. Appendix 1 (a) summarises the relevant section of the Companies Act 1948, and Appendix 1 (b) is a summary of the relevant section of the Code of Commerce 1807. Table 2 lists the Code of Commerce of the ex-French colonies and their Accounting Plans in SSA, and Table 3 is the Companies Acts 5 and accounting systems of each ex-British colony. In the British colonies, the section in their Companies Acts on “Accounts and Audit” was comparable to sections 123–163 of the UK 1948 Act, and for the non-British colonies, the provisions in their Code of Commerce were similar to Articles 8–17 in 1807 Commercial Code. To assist in compliance with the accounting requirements of the 1807 Code, the French designed the Accounting Plan in 1947, whereas the British did not have any similar Accounting Plan to meet the accounting requirements prescribed in the 1948 Act but later came up with the statement of standard accounting practices (SSAPs), now financial reporting standards (FRSs). The three key driving forces that the colonisers used were namely: (i) political governance, (ii) economic and (iii) social policies, which are further sub-divided into elements (as proposed by Klerman et al., 2008). 6 Each of the key driving forces has at least one or more elements of force (Klerman et al., 2008). Political governance during colonisation was either (i) direct rule (Absolute subjugation) or (ii) Table1. (Continued) Members Colonisation Legal Systems Independence Date Zambia British English Common Law 1964 Zimbabwe British Roman Dutch Law 1980 Source: World Factbook 2003, IASC 2003 *Independent from white minority rule Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 6 of 18 Table 2. Accounting laws and accounting systems and practices in French colonies after independence until late 2000 Countries Independence Year Accounting Law(s) Accounting Plan Basis of Accounting Plan Benin 1960 Commercial Code 1807 (Art. 8–17) Benin Accounting Plan French Accounting Plan 1957 Burkina Faso 1960 Commercial Code 1807 (Art 8–17) Burkina Accounting Plan CAR 1960 Commercial Code 1807 (Art. 8–17) OCAM Accounting Plan Simplified French Accounting Plan 1957 Cameroon 1960 Commercial Code 1807 Art. 8–17 OCAM Accounting Plan Chad 1960 Commercial Code 1807 (Art 8–17) Chad Accounting Plan French Accounting Plan 1957 Congo 1960 Commercial Code 1807 (Art. 8–17) OCAM Accounting Plan after 1970 Simplified Version of French Accounting Plan 1957 Gabon 1960 Between 1960– 1971 Commercial Code 1807. Law 7–72, 5 June 1972- Art 24. OCAM Accounting Plan after 1970 Guinea 1958 Commercial Code 1807 until 1986. Ordinance 63, 29 July 1987- Art 38 Guinean Accounting Plan French Accounting Plan 1957 Ivory Coast 1960 Commercial Code 1807 Art 8–17 Ivory Accounting Plan Madagascar 1960 Commercial Code 1807 Art. 8–17 Malagasy Accounting Plan 1987 Mali 1960 Commercial Code 1807 until 1985 Mali Commercial Code Art. 70–82 Law 86–13, March 1986. French Accounting Plan 1957 Mauritania 1960 Commercial Code 1807 Art. 8–11 Mauritania Accounting Plan Niger 1960 Commercial Code 1807 Art.8–17 Senegal 1960 Commercial Code 1807 Art. 8–11 Senegal Accounting Plan Togo 1960 Commercial Code 1807 Art.8–17 French Accounting Plan 1957 Sources; To compile this table, the author has consulted and translated the relevant information from the following documents: (i) Les Guides Juridiques et Fiscaux: Afrique Noire Francophone, 1984 (Legal and Fiscal Guide: Black French Speaking Africa (ii) Droits des Societes en Afrique (1978) par Georges Messonnier, Bibliotheque Africaine et Malgache (Law of Partnership and Companies in Africa) (iii) Code de Commerce des divers pays d’Afrique (Code of Commerce or Commercial Code of African Countries) (iv) Droits Commercial et des Societes en Afrique par Arthur Young International 1989 (Commercial Law and Law of Partnerships and Companies in Africa) Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 7 of 18 5. 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The International Journal of Accounting, 33(2), 269–281. https://doi.org/10.1016/S0020-7063(98) 90030-9 Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 15 of 18 Appendix 1 (A): Companies Act 1948 and Code of Commerce 1807 Companies Act 1948: Section 123-127 ACCOUNTS 123: The directors shall cause proper books of account to be kept with respect to: - (a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (b) all sales and purchases of goods by the company; and (c) the assets and liabilities of the company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions. 124: The books of account shall be kept at the registered office of the company, or, subject to section 147(3) of the Act, at such other place or places as the directors think fit, and shall always be open to the inspection of the directors. 125: The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the company or any of them shall be open to the inspection of members not being directors, and no member (not being a director) shall have any right of inspecting any account or book or document of the company except as conferred by statute or authorised by the directors or by the company in general meeting. 126: The directors shall from time to time, in accordance with sections 148, 150 and 157 of the Act, cause to be prepared and to be laid before the company in general meeting such profit and loss accounts, balance sheets, group accounts (if any) and reports as are referred to in those sections. 127: A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the company in general meeting, together with a copy of the auditors’ report, shall not less than twenty-one days before the date of the meeting be sent to every member of, and every holder of debentures of, the company and to every person registered under regulation 31. Provided that this regulation shall not require a copy of those documents to be sent to any person of whose address the company is not aware or to more than one of the joint holders of any shares or debentures. CAPITALISATION OF PROFITS 128: The company in general meeting may upon the recommendation of the directors resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the company’s reserve accounts or to the credit of the profit and loss account or otherwise available for distribution and accordingly that such sum be set free for distribution amongst the members who would have been entitled thereto if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the company to be allotted and Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 16 of 18 distributed credited as fully paid up to and amongst such members in the proportion aforesaid, or partly in the one way and partly in the other, and the directors shall give effect to such resolution: Provided that a share premium account and a capital redemption reserve fund may, for the purposes of this regulation, only be applied in the paying up of unissued shares to be issued to members of the company as fully paid bonus shares. 129: Whenever such a resolution as aforesaid shall have been passed the directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby, and all allotments and issues of fully-paid shares or debentures, if any, and generally shall do all acts and things required to give effect thereto, with full power to the directors to make such provision by the issue of fractional certificates or by payment in cash or otherwise as they think fit for the case of shares or debentures becoming distributable in fractions, and also to authorise any person to enter on behalf of all the members entitled thereto into an agreement with the company providing for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such capitalisation, or (as the case may require) for the payment up by the company on their behalf, by the application thereto of their respective proportions of the profits resolved to be capitalised, of the amounts or any part of the amounts remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding on all such members. AUDIT 130: Auditors shall be appointed and their duties regulated in accordance with sections 159 to 162 of the Act Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 17 of 18 © 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. You are free to: Share — copy and redistribute the material in any medium or format. Adapt — remix, transform, and build upon the material for any purpose, even commercially. The licensor cannot revoke these freedoms as long as you follow the license terms. Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. No additional restrictions You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits. Cogent Business & Management (ISSN: 2331-1975) is published by Cogent OA, part of Taylor & Francis Group. Publishing with Cogent OA ensures: • Immediate, universal access to your article on publication • High visibility and discoverability via the Cogent OA website as well as Taylor & Francis Online • Download and citation statistics for your article • Rapid online publication • Input from, and dialog with, expert editors and editorial boards • Retention of full copyright of your article • Guaranteed legacy preservation of your article • Discounts and waivers for authors in developing regions Submit your manuscript to a Cogent OA journal at www.CogentOA.com Tawiah et al., Cogent Business & Management (2022), 9: 2087465 https://doi.org/10.1080/23311975.2022.2087465 Page 18 of 18