THE SOUTHERN AFRICAN JOURNAL OF ACCOUNTABILITY AND AUDITING RESEARCH VOLUME 12: 2011 CONTENT Independent review of company financial statements Registered Auditors’ perceptions of independent reviews Independent reviews: perceptions of Chartered Accountants (South Africa) Registered Government Auditors’ perceptions of independent reviews ABSTRACTS Independent review of company financial statements (EM Odendaal & H de Jager) One of the provisions in the Companies Act 2008 which is particularly significant to the auditing profession in South Africa is the introduction of the independent review of financial statements of certain non-public interest companies as an alternative to the conventional audit of financial statements which is currently required for all companies. The Companies Act 2008 provides for regulations regarding independent reviews to be drawn up by the Minister. This article presents a background study and analysis of what constitutes an independent review in order to provide a better understanding of this alternative to an audit of a company’s annual financial statements. It seems that the Draft Regulations regarding which companies should be audited and which independently reviewed will achieve the Act’s primary objective of the protection of the public interest as they are primarily based on a company’s activities and not on quantitative thresholds such as turnover and assets. A robust and well designed set of assurance standards for independent reviews is needed to provide the necessary guidance to practitioners who will conduct independent reviews. Contrary to the requirements in the Draft Regulations, it is suggested that an independent review should be performed by a person who is a member in good standing of a professional body accredited by the Independent Regulatory Board for Auditors, and not the International Federation of Accountants. [ BACK TO THE TOP ] Registered Auditors’ perceptions of independent reviews (EM Odendaal & H de Jager) The Companies Act of 2008 introduces the independent review of financial statements of certain non- public interest companies as an alternative to the conventional audit of financial statements which is currently required for all companies. The objective of the study reported on here is to determine the perceptions of Registered Auditors regarding independent reviews. A questionnaire was used in order to obtain the perceptions of Registered Auditors regarding independent reviews. This questionnaire covered the nature of an independent review, determinants of audit exemption, performing an independent review, and practitioners deemed competent to perform an independent review. The study also sought to determine whether Registered Auditors qualify to perform independent reviews. The study confirms the need for a principle-based stand-alone set of independent review standards so as to create a comprehensive body of guidance for independent review engagements. The study also reveals that Registered Auditors already meet the public interest requirements to perform independent reviews. [ BACK TO THE TOP ] Independent reviews: perceptions of Chartered Accountants (South Africa) (EM Odendaal & H de Jager) The Companies Act of 2008 introduces the independent review of financial statements of certain non- public interest companies as an alternative to the conventional audit. The audit of financial statements can only be performed by a Registered Auditor and is currently still required for all companies. The objective of the study is to determine the perceptions of Chartered Accountants (South Africa) regarding independent reviews. A questionnaire was used in order to obtain the perceptions of Chartered Accountants (South Africa) regarding independent reviews. This questionnaire covered the nature of an independent review, determinants of audit exemption, performing an independent review, and practitioners deemed competent to perform an independent review. The study also evaluated whether Chartered Accountants (South Africa), who are not allowed to perform audits, do in fact qualify to perform independent reviews. The respondents confirm the need for a principle-based stand-alone set of independent review standards as this is likely to clarify the terminology and to enhance the quality of reviews. The study also reveals that Chartered Accountants (South Africa) meet the requirements to perform independent reviews. However, the Independent Regulatory Board for Auditors should oversee the regulation of Chartered Accountants (South Africa) performing independent reviews to ensure that independent reviews are also performed in the public interest. [ BACK TO THE TOP ] Registered Government Auditors’ perceptions of independent reviews (EM Odendaal & H de Jager) The Companies Act of 2008 introduces the independent review of financial statements of certain non- public interest companies as an alternative to the conventional audit of financial statements which is currently required for all companies. The objective of the study is to determine the perceptions of Registered Government Auditors regarding independent reviews. A questionnaire was used in order to obtain the perceptions of Registered Government Auditors regarding independent reviews. This questionnaire covered the nature of an independent review, determinants of audit exemption, performing an independent review, and practitioners deemed competent to perform an independent review. This study further evaluates whether or not Registered Government Auditors are meeting the requirements to perform independent reviews. The respondents confirm the need for a principle-based, stand-alone set of standards for independent reviews. This would streamline the terminology and enhance the quality of reviews as it would obviate the need to analyse the International Standards on Auditing. The study also reveals that Registered Government Auditors are meeting the requirements to perform independent reviews. However, the Independent Regulatory Board for Auditors should oversee the regulation of Registered Government Auditors performing independent reviews to ensure that it is performed in the public interest. [ BACK TO THE TOP ]
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