IRBA: public still need some level of assurance for private companies
Despite the new Companies Act removing the requirement for private companies to be audited, the public and other stakeholders such as SARS, banks and employees still need some level of assurance as to the integrity of their financial statements.
The Companies Act has introduced the requirement for an independent review of the financial statements of private companies (instead of an audit) but has yet to lay out the standards and qualifications of those that may carry them out.
However, Bernard Agulhas, CEO of the Independent Regulatory Board for Auditors (IRBA), said today that all stakeholders need to have some level of assurance in the review process and that therefore professionals – such as those with the Registered Auditor (RA) qualification – are well qualified to carry them out.
“It’s vital that the public still be able to have confidence in the financial statements of private companies, especially now that the audit requirement has been removed and the global credit crisis has brought the need for risk management and transparency to the fore.
“Equally important to interested stakeholders is the certainty that those carrying out the reviews are properly qualified.”
Agulhas noted that he would welcome the chance to engage with the Minister to discuss the requirements for reviews so the private companies’ financial statements remain credible.
“Although the process is perceived as less rigorous than a full audit, the level of understanding needed for the review process is extensive.
“Registered Auditors (RA’s) are currently the only professionals whose suite of standards already includes the review procedures. They are also trained and have the required experience to conduct risk-based engagements.”
RA’s are inspected for compliance with these standards and fall under a strict disciplinary and ethical code to ensure an international level of best practice is adhered to.
Agulhas also said that he is attending the IFAC meeting in
IFAC is the global organization for the accountancy profession that has 158 members in 132 countries. “The IRBA has been instrumental, along with other countries, in working to introduce standards for expressing an alternate level of assurance for entities which do not require an audit. “IFAC saw the need last year to take the first steps in this process and is certainly leading the thinking on this topic.” added Agulhas.
IFAC is the global organization for the accountancy profession that has 158 members in 132 countries.
“The IRBA has been instrumental, along with other countries, in working to introduce standards for expressing an alternate level of assurance for entities which do not require an audit.
“IFAC saw the need last year to take the first steps in this process and is certainly leading the thinking on this topic.” added Agulhas.
