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Thread: Is Audited financials a must?

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    Full Member pietpetoors's Avatar
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    Is Audited financials a must?

    My Trust and my wife's company are not doing much.

    Trust makes a small loss and have 11 transactions (both in and out) per month.

    Pty makes small profit but also only have about 30 transactions (both in and out) most months.
    The Pty qualifies as SMME

    Is it compulsory to have audited financials drawn up for these?
    Only Dead Fish go with the Flow
    http://www.4x4direct.co.za/

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    FYI


    Should the company have audited financial statements?
    The Act requires public companies and state owned companies to have audited financial statements. The Regulations set out additional categories of companies that are required to have their annual financial statements audited, which are discussed below. Notwithstanding the provisions of the Act and the Regulations, the provisions of the Act related to mandatory audits will also apply to any company that voluntarily choose to have audited financial statements, and provides for this choice in the company’s Memorandum of Incorporation.

    So it would depend on your MOI

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    Full Member pietpetoors's Avatar
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    Thanx, I will check the MOI.
    And the Trust?
    Only Dead Fish go with the Flow
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    Hope this helps...

    Trusts
    A trust, in terms of South African law, is based on an agreement between the founder and the trustees for the benefit of the beneficiaries. For this reason, the trust deed is the governing document and similar to the terms of an agreement. In addition to the trust deed, the Trust Property Control Act imposes requirements and governing of the ownership and control of property and the duties of the trustees. The common-law duties of trustees imply that trustees must maintain meticulous records in respect of trust affairs and should always be in a position to account to the Master or the beneficiaries when called upon to do so!

    Trusts are not compelled by statutory law to compile annual financial statements (unlike the requirements of companies and close corporations). It is widely accepted that the preparation of annual financial statements is considered to be a requirement of holding office as a trustee; as the financial statements would be needed to reflect annual income, capital gains, asset and financial values, and for the completion of the trust’s tax returns.

    The lack of a statutory law requiring annual financial statements also leaves a void with regards to the appointment of an auditor or accounting officer. It has become commonly accepted as good practice that a qualified accounting officer (as would be required by a close corporation) be appointed. The accounting officer would perform similar duties as those required of a close corporation. The Master may insist on the appointment of an auditor where there is good grounds based on the type and nature of trust.

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    Quote Originally Posted by pietpetoors View Post
    Thanx, I will check the MOI.
    And the Trust?
    Only if the trust deed specifically requires it. But heed what prettypagegirl says too about good practice.


    As regards the company, if it was registered under the old Act, then strictly speaking yes, it is required to be audited.

    If it was registered under the new Act, or converted to an MOI company, then see the attached
    Summary of frs audit and review v1.pdf

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    Full Member pietpetoors's Avatar
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    Thank you Clive, do you perhaps have such a document that outlines the trust's responsibility or can you tell me under what heading one can find it on their web site?
    Only Dead Fish go with the Flow
    http://www.4x4direct.co.za/

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    Full Member pietpetoors's Avatar
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    O ja and what is a "public interest score"?
    Only Dead Fish go with the Flow
    http://www.4x4direct.co.za/

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    Here you go pietpetoors:

    Information for trusts:
    https://www.pastel.co.za/Other-Paste...ess-Trusts.asp

    and Public Interest Score Calculator

    http://www.gt.co.za/tag/public-interest-score-pis/

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    Quote Originally Posted by pietpetoors View Post
    Thank you Clive, do you perhaps have such a document that outlines the trust's responsibility or can you tell me under what heading one can find it on their web site?
    The trust deed you should have. If it is silent regarding annual financial statements, then there is no requirement unless required by a 3rd party. If you don't have it, check with the founder or the party who set it up.

    Trust deeds vary dramatically and each is essentially a customisation.

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    Full Member pietpetoors's Avatar
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    Thanx to all, this helped a lot.
    Only Dead Fish go with the Flow
    http://www.4x4direct.co.za/

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