Does your company have to undergo an Independent Review at the end of its financial year? And if so, who performs the review? And when does it take place? We’ve got answers to your questions.

As a business owner you know how important it is to remain compliant with legislative requirements. Being compliant aids continuity and it helps you to avoid penalties and the nasty possibility of forced deregistration. But keeping track of changes to the requirements can be a challenge. Case in point: Independent Reviews.

What is an Independent Review?

Independent Reviews were established the new Companies Act, No. 71 of 2008. They require certain companies’ annual financial statements to be independently reviewed on an annual basis. The Independent Reviewer reviews supporting documents to confirm assets and liabilities match the financial statements at year-end. And they follow analytical procedures to review the income statement of the company. The Independent Reviewer then reports and follows up on any discrepancies.

An Independent Review should not be confused with an Audit. An Independent Review is meant to provide limited assurance, while an Audit provides a higher level of assurance. An Independent Review is less detailed than an Audit, requires less work and therefore costs less to perform.

Does my company need an Independent Review?

Whether your company needs an Independent Review depends on a number of factors including its Public Interest Score and whether or not the company is owner managed. (You can click here

for the official guidelines.) One scenario we often encounter is that any company which is owned by a Trust must undergo an Independent Review.

When does the Independent Review happen?

The Independent Review is performed once your financial statements have been compiled. You can only submit your annual tax return once the Independent Review has been completed.

Who performs Independent Reviews?

Any person who is a member in good standing of a relevant recognized professional body and who is qualified as an accounting officer may perform Independent Reviews. Some professional bodies require members to obtain an additional qualification before issuing them with an Independent Review License. Qualified auditors may also perform Independent Reviews.

It is important to note that the practitioner performing the Independent Review must not have been involved in the preparation of the company’s financial statements.

The bottom line

We cannot stress enough how important it is for a company to remain compliant with relevant regulations and legislation. It is therefore critical to establish whether your company requires an Independent Review – and to have it performed timeously if this is the case.

Sentinel provides a range of compliance solutions. We can ascertain whether your company needs an Independent Review – and we can arrange for the review to take place. Our knowledgeable and experienced team is also well positioned to provide further information relating to Independent Reviews and on compliance matters in general.

Werné Strydom BAP(SA), GTP(SA)

Head of Accounting and Tax, Trust Executive

Tel: 021 674 0390 / 011 656 2722