1.Annual Returns to CIPRO!

All CC’s and PTY(LTD), should submit their annual returns to CIPRO, failing which, the company will be deregistered. Many company’s returns are not up to date. For help with your annual returns, contact sgafc@mweb.co.za.

 

2.BEE/EME Certificates

Even if your organisations turnover is below R5million, you will still have to obtain a certificate from DTI, to benefit from tenders from the state and other corporates. Contact us at sgafc@mweb.co.za for help with your BEE certificate.

 

 3.New Companies ACT 2008

The long awaited draft Companies Regulations 2010 were published on the 22 December 2009 for public comment and will become effective on the implementation date of the Companies Act 2008. The Regulations will directly affect auditors and accounting officers’ bottom line.

The Companies Act requires several different topics to be addressed by Regulation, including the manner, form and procedures on how to conduct an independent review of annual financial statements as well as the professional qualifications, if any, of persons who may conduct such reviews.

In brief the draft regulations determine that public companies and those private companies that are deemed to be of public interest are subject to an audit. Non owner managed companies are subject to an Independent Review. Owner managed companies are not required to obtain a report on their annual financial statements but may voluntary or by request from creditors adopt the Independent Review in their memorandum of incorporation.

However It is expected that the Independent Review may replace Accounting Officer reports in statutes other than only the Close Corporation Act.

According to the current draft regulations the Independent Review consist of three different types of reports. The application of the Independent Review will therefore be determined by thresholds related to turn over, assets and number of employees.

All three reports are based on standards as issued by the International Federation of Accountants (IFAC) and it is determined that only an Independent Accounting Professional may issue an Independent Review.

The introduction of the Independent Review addresses two shortcomings of the traditional accounting officer reports. It provides for a standardised qualifications framework for those that will issue Independent Reviews and standardises the process of issuing an Independent Review report.

Although the primary focus of the seminar will be to introduce Independent Review standards, other substantial issues arising under the Companies Regulations 2010 will also be addressed.

The new reporting framework presents an opportunity to significantly reduce the compliance burden on auditors and accounting officers and reduce the cost of producing financial statements for owner managed companies and close corporations. Sole proprietors, partnerships and trusts will be able to voluntary adopt the application of the Independent Review regime in the preparation of and reporting on financial statements.

Nicholaas Van Wyk  www.saipa.co.za

 

 

4. THERE ARE HOWEVER BENEFITS TO BE OBTAINED FROM AUDITS, DESPITE CHANGES TO CORPORATE LAW!

The main purpose of an audit of financial statements is to provide shareholders, financiers, suppliers and other stakeholders with assurance that the financial statements are free from material misstatement and the opinion expressed by the auditors is objective and independent in this regard. Additional benefits that flow from this process include the uncovering of fraudulent activities and assessing the impact of risks, efficiency and quality.

The benefits of an audit to any organisation are immediately visible. Audit recommendation’s lead to enhanced control over processes and increases the efficiency and effectiveness of operations. Management will have a good grip on their financial systems. If there are improvements that are needed in internal controls the audit process can identify this and therefore save the company in the long run. The management, as well as shareholders, suppliers and financers, are also assured that the risks in their organisation are well-managed and effective systems are in place to handle them.

An audit can uncover inaccuracies and discrepancies within an organisation’s records, which may be indications of weak financial organisation or even internal fraud. Financial reviews lead to cost savings and provide management with an assessment of financial stability.

Anyone whose business has a number of staff, functions, office locations or technical systems that s/he is not personally and solely operating may run the risk of errors or irregularities occurring in their business. It is also desirable to check and deter fraud by carrying out a regular audit.

• An audit assures shareholders and directors not involved in the accounting functions on a day-to-day basis that the business is running in accordance with the information they are receiving, and helps reduce the scope for fraud and poor accounting. Standardisation of accounting standards is also achieved.
• Tax benefits may also be obtained which can improve the cash flow of the company and at the same time reduce the tax burden
• An audit facilitates the provision of advice that can have real financial benefits for a business, including how the business is running, what margins can be expected and how these can be achieved. Advice can cover anything from the tightening of internal controls, to reducing the risk of fraud or tax planning.
• An audit will enhance the credibility and reliability of the figures being submitted to prospective purchasers.
• An audit adds credibility to published information for all stakeholders including employees, customers, suppliers, investors and tax authorities:
  • Credit ratings may be affected by not having an audit. Suppliers may not be prepared to give appropriate credit limits. Banks and trade suppliers rely in part on credit rating agencies’ assessment of the company, and will look more favourably on companies that have an audit.
  • In the event of insurance claims, loss adjusters often have more faith in audited accounts.
• An audit provides assurance to shareholders that the figures in the accounts show a true and fair view.