CPDtv 173 Independent Review Part 1

Question 1: Independent Review is a new alternative to a full audit of a company’s annual financial statements, brought about by Companies Act of 2008 and only became effective 1 April 2011

Question 2: Companies Act Regulation 26: every company MUST calculate its public interest (PI) score at the end of the financial year.

Question 3 : In calculating turnover for PI score it must be noted that turnover is not defined in the context of the PI score. The definition in Regulation 164 states “gross revenue derived from the sale of goods, the rendering of services or the use by other persons of the company’s assets yielding interest, royalties or dividends” but Regulation 164 is not authoritative

Question 4 : In reviewing beneficial interest, it is defined in the Act as “when used in relation to a company's securities, means the right or entitlement of a person, through ownership, agreement, relationship or otherwise, alone or together with another person to—
(a) receive or participate in any distribution in respect of the company's securities;
(b) exercise or cause to be exercised, in the ordinary course, any or all of the rights attaching to the company's securities; or
(c) dispose or direct the disposal of the company's securities, or any part of a distribution in respect of the securities,
but does not include any interest held by a person in a unit trust or collective investment scheme in terms of the Collective Investment Schemes Act, 2002 (Act No. 45 of 2002).”
The definition is also further expanded in Sec 56 of the act, applicable to public companies.

Question 5: Any non-profit company must be audited, if it was incorporated:
(i) Directly or indirectly by the state, organ of state, a state-owned company, an international entity, a foreign state entity or a foreign company; and
(ii) (Primarily to perform a statutory or regulatory function in terms of any legislation, or to carry out a public function at the direct or indirect initiation or direction of any of the companies mentioned in (i) above or for a purpose ancillary to any such function