Debt of local authorities in South Africa: Accounting realities leading to ethical, social and political predicaments

  • Dave Lubbe Centre for Accounting, University of the Free State
  • Cobus Rossouw University of the Free State
Keywords: Corporate governance, outstanding debtors, local authorities, ethics, recognition and measurement of debtors and revenue


Local authorities in South Africa face ethical, social and political dilemmas in dealing with the reality of the escalating outstanding debt payable to them. The culture of non-payment, and other reasons, have increased the outstanding debts of local authorities for services rendered by them to disturbing levels. However, the continued accounting recognition of further outstanding debt and revenue by local authorities is in reality in conflict with the relevant accounting principles. All stakeholders in the public sector will have to seriously consider whether the overstatement of outstanding debtors of local authorities does not constitute window dressing, unethical and negligent behaviour and in some instances even reckless conduct of affairs to such serious extent that it can no longer be tolerated. 


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