What is an Independent Review
Regulation 29 of the Companies Act 2008 stipulates that certain entities are required to have Independent Reviews of their financials in accordance with ISRE 2400.
An Independent Review engagement is an alternative assurance engagement where the independent reviewer provides limited assurance on a set of financial statements when compared to that of the reasonable assurance provided by the external auditor.
What is it?
The Companies Act 71 of 2008 stipulates that certain entities are required to have Independent Reviews of their financials in accordance with ISRE 2400.
An Independent Review is an alternative assurance engagement where the independent reviewer provides limited assurance on a set of financial statements when compared to that of the reasonable assurance provided by the external auditor.
The Independent Review differs from an audit as it is focused on the potential of material misstatements whereas an audit focuses more on the internal control environment.
Who must have an Independent Review?
The Independent Review can only be performed by a person who is a member of a recognized professional body and who is qualified as an accounting officer.
The person who performed the compilation of the Annual Financial Statements cannot be the same person as the Independent Reviewer.
ZEELIE Professional Accountants SA only performs Independent Reviews on entities with a public interest score of 100 or less.
How do I calculate my public interest score?
To calculate your public interest score you would add together the results from the following calculations:
- a number of points equal to the number of employees of the company during the financial year
- one point for every R1 million (or portion thereof) in third party liability of the company at the end of the financial year
- One point for every R1 million (or portion thereof) in turnover during the financial year as well as other income.
- One point for every individual who is related to the entity.
What is the cost of an Independent Review?
This will depend on the size and complexity of the entity that has to be reviewed.
What is the difference between audit and independent review?
For companies to be audited An audit is an assurance engagement and is require for entities with a public score of 300 up and those who are required to have an audit as per their MOI or Industry legislation. Independent reviews are done on public scores of 0-300.
What is the purpose of independent review?
The main purpose is to report on whether there are any material misstatements in the financial statements. It is a limited-assurance engagement.
How do I qualify as an independent reviewer?
You would need a finance related degree with majors in accounting and a professional membership with a professional body. If you are a qualified accountant registered with South African Institute of Professional Accountants (SAIPA), then you can register to do the certification: Associate: Independent Reviewer - SAIPA
Do you need our services?
Zeelie Professional Accountants SA can assist you with your Independent Review.
Contact our team via any of the following channels:
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