Herewith our AUGUST newsletter for your information.
The 2016 tax season is well on its way, and e-filing opened for the 2016 tax year which ended February 2016 for most clients.
In addition, there is a provisional tax deadline for end August, for the P1 2017 tax year. ( ending February 2017 ) – Have you filed your submission yet ?
Finsolve has full services to assist you in preparing the information for filing of all required tax returns.
It is advisable to give urgent attention to and collect all your supporting documents to streamline the tax filing season.
Other Tax Services offered include:
- VAT Registration and Returns
- PAYE Registration and Returns
- Submission of Employee Tax Info
- Provisional Tax Returns
- SARS Disputes, Audits & Compromises
What is an Independent Review?
Owners of Small and Medium Enterprises (SMEs) have been obliged to bear the cost of an audit for years. The criteria changed with the implementation of the new Companies Act of 2008 ( effective May 2011) and now they may not have to.
While there are several factors to consider, the decision ultimately depends on the newly introduced Public Interest Score which is calculated in terms of Regulation 26 of the Companies Act.
Under this system, a company is allocated points according to the number of its employees, its annual turnover, its stakeholders and the level of third party liabilities at the end of the financial year.
The Public Interest Score is calculated thus:
- 1 point for each employee or the average number of employees throughout the year.
- 1 point per million rand of third party liability. This is the money owed in terms of loans, debentures, and other financing.
- 1 point for each million rand of turnover during the financial year. If the turnover is half a million rand, score ½ point.
- 1 point for every individual who, at the end of the year, is known to have a direct or indirect beneficial interest in the company. This will include shareholders, beneficiaries of a trust where a trust is a shareholder and other stakeholders.
- Companies scoring 350 points or more are required to have an audit.
Any company, whatever its points score, that holds funds of R5 million or more for a client in a fiduciary capacity, at any time during the year, is also required to have an audit.
Companies scoring between 100 – 350 points must have an independent review conducted by a registered auditor or an Independent review, conducted by a certified accountant.
Companies scoring less than 100 points are required to have an independent review conducted by anyone who qualifies as an accounting officer, unless circumstances indicate otherwise (ie owner manged).
The new system sounds complicated but knowing where the SME fits into the points system simplifies matters.
So does knowing the difference between the two options.
An audit is a thorough examination of a company’s financial status executed by a registered auditor. It involves tests of internal controls and substantive procedures and carries far more weight than a review in that it would result in the auditor expressing the highest level of assurance. This is referred to as ‘reasonable assurance.’ Companies seeking loans may be required by their bank to have an audit before their application is considered. Thus, the decision to not have an audit may very well impair an entity’s ability to obtain external funding.
A review on the other hand provides a lesser level of assurance that a company’s financial statements do not have any known errors or misstatements. It must be undertaken by an independent accounting professional who can be but does not have to be a qualified chartered accountant, unless otherwise required under the points system.
One thing is clear. SMEs with a Public Interest Score of less than 100, which are no longer required to have an audit, will save money!
Finsolve has full services in providing Independent Reviews as well as Audits for your business.
If you require any further information regarding any of the above services, please do not hesitate in contacting Melanie at our offices on 086 148 8883.
Content compiled by
Gavin Beretta – Financial Director
MBA, FCIS, CMT
FinSolve – Registered Accountants,
Business Valuation and Tax Practitioners