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CIPC: Republication: Rotation of Auditors_section 92 of the Companies Act
- 08 July 2024
- CIPC
- South African Accounting Academy
In May 2011 the Companies Act came into effect, which came with many new provisions which were not part of the 1973 Act. Amongst the new provisions is the rotation of auditors after the expiration of 5 years.
Subsection 1 of the abovementioned Section provides that, the same individual may not serve as the auditor or designated auditor of a company for more than five (5) consecutive financial years.
In 2016 it was the first rotation for the auditor or designated auditor, the next five (5) year cycle started May 2021 and CIPC reminded companies to comply accordingly. CIPC advised companies to make use of the on-line transaction for the change of auditors available on CIPC's website for quick turnaround times.
Click here to download Notice 35 of 2021:
https://www.cipc.co.za/wp-content/uploads/2024/07/Notice_35_of_2021.pdf
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.
- As an auditor, independent reviewer and accountant, you also need ensure that the auditor is rotated in accordance with Section 92 of the Companies Act – on all mandatory audits.
- Where you perform compliance tasks on behalf of your client, you need to ensure that you comply with all relevant notices/enforcements/practice notes and that you are aware of the latest media statements issued by CIPC as the regulator.
- Company Secretarial staff play a critical role in bridging the gap between entities and CIPC. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and company secretarial practitioners to keep abreast of such changes in so that companies continue to meet their compliance obligations.
Relevance to Your Clients:
- An entity (company or close corporation) has a duty to comply with the Companies Act, and all relevant notices/enforcements/practice notes and to be aware of the latest media statements issued by CIPC as the regulator.