SAIBA 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:
- being a designated member SAIBA,
- relevant subjects in accounting, and
- subject to a code of conduct.
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
Relevant laws and regulations that require an accounting officer to issue a report on financial and/or non-financial information:
- Close Corporations Act 69 of 1984
- Immigration Act, 13 of 2002
- Sectional Titles Schemes Management Act, No. 8 of 2011 (Exemption from Chief Ombud).
- Trust Property Control Act, 57 of 1988 and the Trust deed.
- SA Schools Act 84 of 1996.
- Financial Advisory and Intermediary Services Act 37 of 2002 (Accounting Officer exemption).
- Non-Profit Organisations Act 71 of 1997.
- National Credit Act 34 of 2005 (Application submitted).
- Co-operatives Act 14 of 2005.
- Fund-Raising Act 107 of 1978.
- Lotteries Act (No 57 of 1997).
- Broadcasting Act, Act No 4 of 1999.
- Construction Industry Development Board Act No. 38 of 2000.
Opportunities for Business Accountants in Practice (SA)
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 SAIBA 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.
What SAIBA needs to do
SAIBA 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.
What you need to do
The firm should study the SAIBA 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: