Do you know what your Companies PI Score is?
Make use of our PI Score calculator.
The Companies Act, 2008 (Act 71 of 2008 – Company Regulation 26(2)), has made mandatory the submission of a Company PI Score (PIS) for all private and personal liability companies and close corporations in South Africa.
What is a Public Interest Score?
A PI Score is an indication of your company’s level of public interest. Your company’s level of public interest indicates the level to which it must be regulated, and the level of financial reporting that is required.
Public Interest Score (PIS) must be calculated and submitted at the end of each financial year, along with the company’s financial statements, to the CIPC (Companies and Intellectual Properties Commission).
The PI Score 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 Public Interest Score will determine whether your company requires an 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 a high PIS.
Calculating your Companies PI Score:
Public Interest Score is determined on a points system. Points are given for a simple set of structural and financial parameters:
- Number of employees (or average over a financial year, if this number varies from year to year) – 1 point per employee
- Third party liabilities – 1 point per R1 million (or portion of)
- Turnover – 1 point per R1 million (or portion of)
- Number of shareholders – 1 point per shareholder (irrespective of how many shares they hold individually).
These points are added to calculate your company Public Interest score. The higher the PI 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 Public Interest Score of less than 350, if financial statements are compiled externally by a registered accountant, in compliance with International Financial Reporting Standards (IFRS).
Use our Public Interest Score Calculator to determine what level of financial accountability reporting you need to submit: compilation, review or audit.
What does the Pi Score tell us?
The results of the Public Interest Score indicate the following:
1. Whether the annual financial statements of the company must be audited or independently reviewed;
2. What financial reporting standards should be utilised in the preparation of the annual financial statements;
3. Whether the company requires a Social and Ethics Committee;
4. The size of the company when appointing an appropriate business rescue practitioner; and
5. If the company is required to file their annual financial statements with the CIPC
Small companies and SME’s can calculate their Pi Score quickly!