All companies must prepare annual financial statements (“AFS”). Public and State Owned companies (SOC) must have audited AFS while a Private, Personal liability and Non-Profit company and close corporation is not required to have its AFS audited unless –
- in the ordinary course of its business, it holds assets in a fiduciary capacity for persons who are not related to the company, in excess of R5 million in value at any time during the year;
- it is a non-profit company and was directly or indirectly incorporated by the state, a state owned company or foreign entity;
- it is a non-profit company and was incorporated primarily to perform a statutory or regulatory function in terms of any legislation or to carry out a public function; or
- its public interest score in that financial year, as calculated in accordance with Regulation 26 (2), is 350 or more or is at least 100 if its AFS have been internally compiled.
Any other company must have its AFS independently reviewed in accordance with ISRE 2400 unless –
- it is exempt, in terms of section 30 (2A) to have its AFS audited for that year or reviewed (every person who is a holder or has a beneficial interest in any securities issued is also a director of the company);
- it is required by its own Memorandum of Incorporation (“MoI”) to have its AFS audited; or
- it has voluntarily had its AFS audited for that year.
A company or a close corporation that is required to have its AFS audited, as indicated above, must file a copy of its latest approved audited AFS with its annual return while a company or a close corporation that is not required to have its AFS audited as indicated above, may file a copy of its audited, reviewed AFS or a financial accountability supplement (CoR 30.2) after its annual return.
Please note that the information provided does not constitute legal or professional advice, but rather the applicability of existing theory to a given practical situation. Due care is taken to ensure that the information is correct, but it remains subjective and an interpretation of application of information.