A document entitled Draft Regulations to the Companies Act of 2008 was issued in December last year and contained guidelines on whether a company should be audited or not.

According to these regulations, the following rules will apply to the more common types of companies:

• All public companies must be audited in terms of the International Standard on Auditing, using the International Financial Reporting Standards (IFRS) as accounting framework.
• Private companies with assets exceeding R5 million and a turnover exceeding R20 million in the preceding year will not require audits. However, these companies will have to be “independently reviewed”. The financial statements should be drawn up according to the International Financial Reporting Standards for Small and Medium Entities (IFRS for SME’s).
• Owner-managed companies and small private companies will not require any form of audit or review and there will be no prescribed accounting framework.

It is uncertain when these regulations will be implemented, but it may be during the course of the second semester.

The rules for less common types of companies, e.g. state-owned or non-profit companies and companies holding assets in fiduciary capacity differ slightly from the rules set out above. For more information, please contact Jaco Odendaal, a partner of Tenk Loubser & Associates in Somerset West, who has worked closely with Floor Attorneys Incorporated on the interpretation of the Companies Act of 2008.