Sectional Titles: Auditor opinions

27 October 2022
Auditing and Assurance
South African Accounting Academy

The Sectional Titles Schemes Management Regulations, 2016, issued in terms of the Sectional Titles Schemes Management Act, 2011 (Act No. 8 of 2011), have been effective since 7 October 2016. The Regulations contain the Management Rules for sectional titles schemes, as prescribed and as amended by a body corporate in accordance with section 10 of the Act.

Rule 26 addresses the financial records, budgets, reports and audit of a body corporate.

Contents:

Introduction – Management Rule 26(5)
The body corporate’s audited annual financial statements as contemplated in Rule 26(5)(c)(i)

Financial Reporting Frameworks
Going Concern
Other information

Compliance by the body corporate with certain accounting requirements in terms of Rule 26(5)(c)(ii)

The consideration of laws and regulations in an audit of financial statements

Auditor opinions as contemplated in terms of Rule 26(5)(c)(iii) and (iv)
Illustration of separate section in the auditor’s report: Report on other legal and regulatory requirements

Illustrative wording
Compliance findings with accounting requirements (Management Rule 26(5)(c)(ii))
2 Appendices with complete auditor's reports in different circumstances

This SAICA communication has been revised in September 2022.

Click here to download the Guidance:

https://saicawebprstorage.blob.core.windows.net/uploads/resources/Sectional_Titles_Comm_Revised_September2022.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

The Sectional Titles Schemes Management Regulations 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, you need to be aware of relevant guidance that has been issued by professional bodies and regulators, e.g. SAICA.
This SAICA publication contains guidance on the body corporate’s audited annual financial statements as contemplated in Rule 26(5)(c)(i)

Relevance to Your clients:

A sectional title/home owners’ association has a duty to comply with the Sectional Titles Schemes Management Regulations, and members have to fulfil their duties accordingly, otherwise they could be held liable.

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