CAN SAICA MEMBERS REGISTER A PRIVATE COMPANY TO PERFORM INDEPENDENT REVIEWS?

CAN SAICA MEMBERS REGISTER A PRIVATE COMPANY TO PERFORM INDEPENDENT REVIEWS?

Companies Regulations, regulation 29(4) states that the independent review of a company’s annual financial statements must be carried out in the case of a company whose: 

  • Public interest score (PIScore) for the particular financial year was at least 100.
    • By a registered auditor, or
    • A member in good standing of a professional body that has been accredited in terms of section 33 of the APA; or
  • PIScore for the particular financial year was less than 100, by either
    • A registered auditor or
    • A member in good standing of a professional body that has been accredited in terms of section 33 of the APA or
    • A person who is qualified to be appointed as an accounting officer of a close corporation in terms of the Close Corporations Act, no 71 of 2008 includes a juristic person. 

The Companies Regulations therefore allows for a CA(SA) to perform an independent review of a company’s financial statements, whether the company’s public interest score is at least 100 or is less than 100. An AGA(SA) is only allowed to perform independent reviews for companies whose public interest scores are less than 100, by virtue of the fact that an AGA(SA) is allowed to be appointed as an accounting officer of a close corporation. 

Members must however consider the capacity in which they will be providing such services. A CA(SA) who is also a registered auditor (RA) and who is performing independent reviews of company financial statements in his/her capacity as an RA will not be able to do so in the form of a private company. When performing independent reviews in their capacity as chartered accountants, CAs(SA) need to refer back to the definition of who can perform independent reviews as stated in regulation 29(4). Remember, however, that a private company cannot be appointed as an accounting officer. Also refer to the discussion under the heading ‘accounting officer.’ 

SAICA members are requested to consider the above when setting up a new private company or other type of entity to ensure that they meet the requirements of relevant legislation with respect to providing certain types of professional services, including the capacity in which they will be providing those services. 

Reference: 

Small and Medium Practice Newsletter – 1st Quarter 2016