The Companies Act, 2008 (Act 71 of 2008 - Company Regulation 26(2)), has made mandatory the submission of a Company Public Interest Score (PIS) for all private and personal liability companies and close corporations in South Africa.
PIS must be calculated and submitted at the end of each financial year, along with the company’s financial statements, to the CPIC (Companies and Intellectual Properties Commission).
The PIS is an indication of your company’s level of public interest; in other words – the level to which it must be regulated, and the financial reporting standards required for transparency, in the public interest.
Your company’s PIS will determine whether your company requires independent review, or audit, of financial statements, by whom, and what financial reporting standards are applicable. It can also determine the need for a social and ethics committee for private (non-State owned and unlisted) companies with high PIS.
PIS is determined on a points system. Points are given for a simple set of structural and financial parameters:
These points are added to calculate your company PIS score. The higher the PIS score, the higher the requirement for public accountability, i.e. regulation and oversight through financial statements review and audit, and, where applicable, social/ethics review.
However, these requirements are also subject to whether a company is owner managed or not, and whether financial statements are internally or externally compiled. Review may be required for internal compilations, whereas only compilation is required for an owner managed company with a PIS of less than 350, if financial statements are compiled externally by a registered accountant, in compliance with International Financial Reporting Standards (IFRS).
Use our PI Score Calculator to determine what level of financial accountability reporting you need to submit: compilation, review or audit.