CC Accounting Officer

[desA]

Des, this discussion on the new companies bill should help.

Thanks very much, Dave A. That's very useful information - very helpful indeed.

Time to do my homework on the new emerging business structures.

[sgafc]

A cc requires an accounting officer to sign off the books. An accounting officer is one of two qualifications - a chartered accountant or a qualification from CIS, Chartered Institute of Secretaries(Secretary as in company secretary for JSE purposes). The books may be done by abyone only the financials need to be signed off by the accounting officer. It is not an audit, simply that the financials are prepared in the correct manner, a rather vague description.

There are about 6 qualifications recognised for the duties of accounting officers.The fact that the books does not have to be audited, does not imply that a set of financial statements can just be cooked up.

The accounting officer still has to agree the financial statements with the books of account, and should have working papers to back up his investigations. As of this year, financial statements should comply with International Financial Reporting Standards(IFRS), failing which, criminal charges could be brought against the accounting professional. To be exempted, CC should apply for the implementation of Micro Gaap.

Closely held PTY(LTD), will also be exempted from audits.

[RogerH]

Hi, the new Companies Act creates 3 levels for Audit, Independent Review and (for most smaller companies - and cc's out there) EXEMPTION.

To provide some background a couple of concepts/issues are NB.

The main concept introduced into the business environment affecting financial reporting is one of "Public Interest", this in a nutshell is determined by the nature of a companies business, its size (turnover and assets) and it employee base. A significant factor in the new environment is the concept of STAKEHOLDERS (and in RSA the INCLUSIVE STAKEHOLDER concept that essentially means everyone has to be treated the same - i.e. shareholders are not preferential stakeholders (as elsewhere).

PS the same principles will apply to both companies and close corporations.

Together what this means is that the larger/more significant your "STAKEHOLDER FOOTPRINT" (my terminology), normally related to the size of your business (Co or CC), the more financial reporting requirements will be placed on you.

Some thresholds were published in the regulations (December 2009):
1. Exempt companies are those with the same people being both shareholders and directors, the nature of what they do is not public interest

2. Independent Review is broken down into 3 levels (Reprotign Standards in Brackets)
(i) Assets below R 5Mill/Turnover below R 20Mill (No prescribed Standard)
(ii) between this and; (ISRS 4400)
(iii) Assets R 100Mill/Turnover R 200Mill or 150 employees (ISRE 2400)

3. Audit, either
- State Owned
- Public Companies
- Private Companies (with a Public Interest)
- Voluntary Audit (any size company can voluntarily be audited)

There are some more "technicalities" that could influence this but this gives the framework...

(I hope this clarifies things - sorry to "burst" into lecture mode)