Independent reviews are used between audits, or in place of audits for smaller companies. They are quicker, and when using an outside accounting firm for a review, less costly. It is a more accessible and affordable option for many smaller companies – though not a replacement for an audit if audits are required by statute and company law regulations).
For owner managed companies with a Public Interest Score (PIS) of less than 350, but with independently compiled financial statements, it is a voluntary process. This is also the case for owner-managed companies with internally complied financial statements, but a PIS of less than 100.
A company registering for an independent review must:
Apply for independent financial review by a qualified individual or firm.
- PIS at or over 100: A registered auditor or member ‘in good standing of a professional body that has been accredited in terms of section 33 of the Auditing Professions Act’
- PIS less than 100: ‘A person who is qualified to be appointed as an accounting officer of a close corporation in terms of section 60 (1), (2) and (4) of the Close Corporations Act, 1984 (Act No. 69 of 1984)’.
More detail on who to go to about applying for independent review can be found here
The benefits an independent review gives a company:
An independent financial review is a limited assurance procedure that is essential for any company – whether required or not.
- Even though a review is focused on assessing the accuracy of a balance sheet, and is therefore not watertight (as a full audit would be), independent reviews still help prevent fraud.
- Not all irregularities are intentional. An independent review might flag practices that could impact on the financial statements or have legal consequences down the road.
- An Independent review will also stop bookkeeping errors impacting on financial accuracy and statements, helping business to maintain internal controls and accurate record-keeping
- Financial reviews can help companies streamline their financial operations and financial reporting methods
- Cash management can be tightened an improved through insights gained from independent reviews.
TAT has the experience and knowledge to assist you in deciding which Financial Review is Best for your Business.
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