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CIBA members that have obtained the designation Business Accountant in Practice (BAP) are recognised as accounting officers in terms of Section 60 of the Close Corporations Act, 1984
An accounting officer is a person who meets the qualification requirements as detailed in section 60 and as a result, may issue an accounting officer and other reports on the financial statements and information of close corporations and other entities. The qualification requirements include:
Accounting officers have statutory recognition to issue specific types of reports on financial statements and other information. However, most, if not all of the relevant statutes do not stipulate how a member in practice should perform a reporting engagement. A member and his/her client should therefore determine the scope, extent, and result of the work by way of a contract.
In the absence of a clear agreement a member’s engagement risk will increase significantly.
The purpose of this Guide is to assist members in practice to establish an engagement framework that can be applied when issuing accounting officer or similar reports on financial statements.
Relevant laws and regulations that require an accounting officer to issue a report on financial and/or non-financial information:
Mandatory Accounting Officer appointments
The Close Corporations Act, 1984 require the appointment of an Accounting Officer for a close corporation. AO engagements may be performed in terms of the CIBA Guide for Accounting Officer Engagements. This guide is based on the ISRS 4400, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information.
In addition, BAP(SA)s may approach any entity established and administered in terms of the laws and regulations listed above and offer their services as AOs.
Voluntary Accounting Officer appointments
An accounting officer appointment may be either a statutory requirement or a voluntary appointment. This means that, for example, a company may request a BAP(SA) to perform accounting officer duties for the company. This is not a statutory requirement, but a voluntary contract entered into between the company and the BAP(SA). In such cases the engagement letter will stipulate that the BAP(SA) is requested to perform the same duties as he/she would perform for a close corporation. The accounting officer will simply report to the company and not the close corporation.
CIBA is a legislative controlling body for accountants, accounting officers and independent reviewers. As a controlling body we are required to monitor and sanction compliance to standards of member conduct. We perform this function by ensuring compliance by our members to the IAASB’s engagement standards. We offer CPD and training courses to help guide members with their everyday challenge in the workplace. We lobby government and SME associations to allocate work to business accountants.
The firm should study the CIBA Guide and the ISRS 4400 and ensure that all AO engagements are performed in terms of this standard. The firm should study any relevant laws, regulations, founding documents or contract terms to determine the qualifications of the persons required to perform the engagement, prior to performing the engagement.
Members are required to register with www.saiba.academy and read www.accountingweekly.com to stay updated and do a specialist license to unlock additional advisory work.
In summary you can:
CIBA has provided a number of guides, videos and PowerPoint slides that will assist accountants with understanding their responsibilities in terms the various types of engagements: