Allow Alchemy to assist with different types of audits. Our audit services include:
- Statutory Audits
- Independent Reviews
- Stock Audits
- Special purpose audits
- Interim audits
What is the standard ‘Audit’ frequency?
Most companies receive an audit once a year, while even larger companies can receive monthly audits. For some companies, audits are a legal requirement due to their Memorandum of Incorporation or legislative requirements.
Do you know about the changes in the Companies Act?
On the 1st April 2011, the Companies Act 2008 (“Act”) replaced both the Companies Act 1973 and Corporate Laws Amendment Act 2006. The change in the Act introduced an “Independent Review” as an alternative form of Auditing the financial statements. Private companies in South Africa are able to replace their annual audits with Independent Reviews depending on the Public Interest score of the entity. Another change the act brought about was removing the formation of new Close Corporations, although established Close Corporations can continue to operate under the Close Corporation’s Act. One of the objectives of the changed act was to try and align reporting requirements of Companies and Close Corporations, creating consistency and clarity. Another objective was to simplify the regulation of small to medium-size enterprises and make it less costly.
The Act changes brought in options for companies to choose from. Companies can decide to have a financial review or audit of their financial statements. The knock-on effect was that companies could save fees relating to auditing and small business were enabled to select a less onerous and costly way of producing financial statements independently reviewed rather than the traditional route of audit under the new Companies Act.
Public companies are required to be audited under the new Companies Act as well as private Companies required to do so under their Memorandum of Incorporation.
The key shift is that around 90% of all companies that were previously required to obtain an audit report may now be exempt, and the remaining 10% will be subject to either an independent review report or audit depending on the Public Interest score and the terms of the Company’s Memorandum of Incorporation
What is an ‘Audit’
An audit is an objective and independent examination and evaluation of the financial statements of an organization. This is done to ensure financial records are a fair and accurate representation of the business and the transactions performed. Audits are performed internally by employees of the organization or externally by an outside party. The South African Revenue Services (SARS) can perform audits to verify the accuracy of a taxpayer’s returns or other transactions. When an audit is being performed by SARS, it can carry a negative connotation and be seen as evidence of some type of wrongdoing by the taxpayer.
What is the value of an ‘Audit’?
Audits performed by independent auditors can be helpful in removing bias when it comes to the verification of a company’s financial records. Audits look for “material errors” and irregularities in financial statements.
Audits help provide stakeholders with a sense of accuracy when regarding the state of the entity being audited and can help enable stakeholders to make better, more informed decisions. Audits performed by third parties can be candid and honest without affecting business operational relationships.
Statutory audits are performed, taking account of the various compliance and disclosure requirements, both local and foreign.
The provision of audit services is conducted within a separate company namely, Alchemy Audit Services Incorporated, in keeping with the required legislation, but encompasses the same mission statement and objectives as those of Alchemy Financial Services Incorporated.