National Credit Regulator publishes Guidelines for the Compliance Report and Assurance Engagement Report

The National Credit Regulator (NCR) has published the Compliance Report which all credit providers are required to complete and submit to the NCR on an annual basis under Guideline 02 of 2010.

The Compliance Report must cover the credit provider's financial year. It must be submitted to the National Credit Regulator within six months after the financial year-end of the credit provider.

The purpose of the compliance report is for management of the credit provider to confirm whether the credit provider conducts its operations in accordance with the requirements of the National Credit Act, the National Credit Act Regulations and the Conditions of Registration.

“Credit providers are urged to review the Guidelines as soon as possible,” says Abel Tshimole, Manager of Registrations and Compliance at the National Credit Regulator. “This will assist them to carry out the preparatory work required to complete and submit the report on time.” He explains that credit providers who rely on external parties to assist them in the completion of their reports should contact such parties early to avoid delays.

The first Compliance Report to be submitted by a credit provider is in respect of the financial year of the credit provider ending after 01 January 2011. In other words, credit providers whose financial year ends on 28 February 2011 will be required to submit their first report for the period 01 March 2010 to 28 February 2011 by no later than the 31 August 2011.

The National Credit Regulator has also published Guidelines for an Assurance Engagement Report for non-audited credit providers under Guideline 03 of 2010. These apply to credit providers who by law are not required to appoint an auditor to conduct an audit of their annual financial statements. The purpose of the Assurance Engagement Report is to identify areas of non-compliance with the National Credit Act, National Credit Act Regulations and the credit provider’s Conditions of Registration.

The Assurance Engagement report must be submitted on an annual basis to the National Credit Regulator within six months after the financial year-end of the credit provider. The first Assurance Engagement Report to be submitted by a credit provider is in respect of the financial year of the credit provider ending after 01 January 2011.

“It is important for both credit providers and their service providers (accounting officers/auditors, etc) who are authorized to complete both the compliance report together with the assurance engagement report that they ensure consistency, accuracy and validity in reporting as the information gathered is important to gauge the level of compliance in this sector” states Abel Tshimole.

The procedures to be performed, as well as the format of the Assurance Engagement Report are contained in the Guideline.

“Credit providers, as they will be reliant on external parties to complete these Assurance Engagement Reports are urged to contact them timeously to ensure punctual submission of the assurance report,” adds Tshimole. “Furthermore, it must be noted that both the credit providers and their service providers need to use the guidelines as a working document to allow them to work towards compliance throughout their financial year and not just wait for the reporting time,” states Tshimole.

The guidelines relating to the Compliance Report and the Assurance Engagement Report for non-audited credit providers have been published on the NCR's website and can be downloaded on http://www.ncr.org.za/.

“Credit providers who do not submit the Compliance Report and their Assurance Engagement Report on time may expose themselves to punitive action, which may result in cancellation of their registration” concludes Tshimole.

The National Credit Regulator can be reached on 0860 627 627 or http://www.ncr.org.za/