Assurance updates

An audit is an inspection of your business accounts, including accounting systems documents and invoices. The goal of an audit is to determine if the financial statements are representing an accurate view of the company.

If the saying that “any publicity is good publicity” were true, auditors would have come very close to celebrity status lately.  After recent events like state capture, the SARS report, VBS Bank, Steinhoff, etc.

The annual audit is never an event that our clients look forward to. It can be time consuming for the client and, of course, quite costly. The Companies Act introduced a “lighter” alternative to the audit in the form of the independent review, however many clients, understandably, are seeking ways to reduce the costs.

Planning is one of the most important parts of the audit process and proper planning will ensure that the audit is executed and conducted properly. The audit process includes the following.

An external audit provides reasonable (but not absolute) assurance that the financial statements of the entity being audited are free from material misstatement. However, external auditing is often seen as costly and of no practical value to businesses. This is particularly prevalent in small to medium-sized businesses.

There are many legal, and practical, reasons why companies may be structured in groups, branches, etc. as opposed to just one reporting unit. 

Users of financial statements are often surprised at the extent of estimation involved in the preparation of financial statements.  One would think that accounting is more of an art than a science and that the world of reporting consisted of measurables – prices, percentages, debits, credits, etc.   Sadly, that is not the case anymore.  As business has become more

Previously, only Sectional Title Schemes with ten or more units were required to have their annual financial statements audited.

Auditors, especially in South Africa with its “Reportable irregularities” requirements, are painfully aware of their duties to report irregularities. These duties are well defined in the Auditing Professions Act, International Standards on Auditing, etc.

Independence is the cornerstone of the auditing profession.  Independence is just another, slightly stronger, word for objectivity. If an auditor is to add any value to the client, investors, lenders, the economy or even the world, he/she must be objective, or “independent” of the information and the entity being audited.