CIPC: Appointing and resignation of auditors using the online services

06 December 2021
Accounting
South African Accounting Academy

This change is due to the complaints received from companies regarding the appointment and/or resignation of auditors in the company and in line with Section 85(3).

This poses a very practical problem…it is especially restricting for accountants and auditors who wish to be appointed for new clients and for resigning prior accountants/auditors, who do not maintain their appointments at the CIPC.

SAAA is of the opinion that signed resolutions from the board of directors and stakeholders might be sufficient to prove compliance with Companies Act Section 85(3). Perhaps CIPC could change the auditors’ portal to require signed documents to be uploaded before the change takes effect (similar to the existing CoR39s).

SAAA will make the necessary submission to the appropriate regulators for action/to be escalated further. Keep an eye out for feedback/updates on this!

Click here to download Notice 58 of 2021:

http://www.cipc.co.za/za/wp-content/uploads/2021/11/Notice-58-of-2021-Notice-to-Customers-on-Eservices-CoR44.pdf

How does this affect you and your clients?

Relevance to Auditors, Independent Reviewers & Accountants:

The Companies Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
This CIPC notice will no longer allow auditors to effect changes to auditors on eservices – this function will have to be performed by the current directors or the company secretary (and your clients might not have the necessary knowledge and experience to perform this task properly)…
As an auditor, you also need to monitor your client’s compliance with the Companies Act and all relevant notices/enforcements issued by CIPC as the regulator.

Relevance to Your clients:

This CIPC notice will only allow current directors or the company secretary to effect changes to auditors on eservices – something that is currently performed by the client’s auditors…
The client has a duty to comply with the Companies Act, as well as relevant notices/enforcements published by the Regulator.

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