No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.
Auditing and Assurance
Clearer Checks. Stronger Reporting. Greater Confidence.
Audits and reviews can uncover issues that are easy to miss in day-to-day operations. Strong controls, accurate reporting and proper preparation help businesses meet their obligations, reduce risk and give stakeholders greater confidence in the numbers.
Auditing and Assurance
Clearer Checks. Stronger Reporting. Greater Confidence.
Audits and reviews can uncover issues that are easy to miss in day-to-day operations. Strong controls, accurate reporting and proper preparation help businesses meet their obligations, reduce risk and give stakeholders greater confidence in the numbers.
Prepare Better for Audits and Reviews
Explore practical articles that help you understand what auditors look for, how to prepare properly and where reporting or control issues can create problems during the process.
Need Support With Audit Preparation?
The right preparation can make the process far smoother. At The Accounting Team (TAT), we help businesses get their records, reporting and supporting information in order so they are better prepared for audits, reviews and assurance requirements.
More Financial Topics to Explore
Keep reading for practical information on the financial and compliance issues that often connect with audit, reporting and business management.
Frequently Asked Questions
What is the difference between an audit and an independent review?
An audit provides a higher level of assurance and involves a detailed examination of the company’s financial statements, records and supporting information. The auditor gathers sufficient evidence to express an opinion on whether the financial statements are fairly presented in line with the applicable reporting framework.
An independent review is narrower in scope and provides limited assurance rather than the reasonable assurance provided by an audit. It usually involves analytical procedures, enquiries and a review of the financial information rather than the same level of testing required for an audit.
Does every South African company need an audit?
No. Not every South African company is required to have its annual financial statements audited.
The requirement depends on factors such as the company’s Public Interest Score, how its financial statements are compiled, the nature of its activities and the requirements contained in its Memorandum of Incorporation. Some companies may instead require an independent review, while others may qualify for an exemption.
What determines if a company needs an audit?
For private and personal liability companies, an audit may be required if the company holds assets in a fiduciary capacity for unrelated parties above the prescribed threshold, reaches the relevant Public Interest Score threshold or is required to have an audit under its Memorandum of Incorporation.
The financial statement preparation method also matters. CIPC states that a private company with internally compiled financial statements requires an audit at a Public Interest Score of 100 or more, while one with independently compiled financial statements reaches the audit threshold at a score of 350 or more.
What is a Public Interest Score and why does it matter?
A Public Interest Score, commonly called a PIS, is a calculation used under South African company regulations to help determine the level of financial reporting and assurance a company may require.
The calculation considers the average number of employees, third-party liabilities, turnover and the number of individuals with a beneficial interest in the company’s securities. The resulting score can affect whether the annual financial statements need to be audited or independently reviewed.
How should a business prepare for an audit?
Good audit preparation starts with making sure the financial records are complete, current and properly reconciled. Bank accounts, debtors, creditors, payroll records, fixed assets and other balance sheet accounts should all agree with the underlying supporting information.
It also helps to organise invoices, contracts, bank statements, tax records and other supporting documents before the audit begins. Any unusual transactions, unreconciled balances or outstanding accounting issues should be identified early so they can be addressed before they delay the process.
What documents do auditors usually ask for?
The exact list will depend on the business and the scope of the audit, but auditors commonly request annual financial statements, trial balances, general ledgers, bank statements, reconciliations, customer and supplier records, payroll information, tax records and supporting invoices.
They may also request contracts, loan agreements, fixed asset registers, inventory records, company documentation and evidence supporting significant or unusual transactions. Keeping these records organised throughout the year can make the audit process far easier to manage.
What are the most common issues found during an audit?
Common issues include unreconciled accounts, missing supporting documents, incorrect transaction classifications, errors in revenue or expense recognition, outdated asset records and inconsistencies between the accounting records and the financial statements.
Auditors may also identify weaknesses in internal controls or processes that increase the risk of mistakes going undetected. Finding these issues does not automatically mean there is a serious problem, but they should be investigated and corrected where necessary.
What happens if an auditor finds errors in the financial statements?
The first step is to assess the nature and significance of the error. Some errors can be corrected through an adjustment to the accounting records or financial statements before they are finalised.
If an error is material and is not corrected, it may affect the auditor’s report or opinion. The outcome depends on the size and nature of the issue, so it is important to address audit findings promptly and provide any additional information or supporting evidence requested.
What is assurance and how is it different from auditing?
Assurance is the broader term for professional work designed to increase confidence in financial or other information. An audit is one type of assurance engagement.
Audits provide reasonable assurance over financial statements, while other assurance work may provide a different level of assurance depending on the engagement. Independent reviews, for example, provide limited assurance and involve less extensive procedures than a full audit.
How can The Accounting Team support our audit and assurance needs?
We provide auditing and assurance services designed to help businesses meet their reporting and regulatory requirements with greater clarity and confidence.
Our services include statutory audits, independent reviews and support around financial reporting and internal controls. We review the financial information, assess the relevant reporting requirements and work with you through the process so you understand what is needed and where any issues may need attention.