South Africa

In South Africa, several pieces of legislation govern the financial reporting requirements.

The Companies Act of 2008, effective as of 2011, codifies the application of IFRS as issued by the IASB and approved by the Financial Reporting Standards Council (FRSC) by listed companies, and prescribes either IFRS or IFRS for Small- and Medium-sized Entities (SMEs) for different types of companies based on a public interest scoring system.

A company’s public interest score is determined by the total number of points it receives based on the number of employees, third party liabilities, turnover, and shareholders. Stated owned companies and certain non-profit companies are also required to use IFRS. Public companies that are not listed on an exchange as well as private companies and certain non-profit companies that have a public interest score of at least 100 points may choose to apply full IFRS or IFRS for SMEs. SMEs with a public interest score under 100 points whose financial statements are internally compiled can use their own accounting policies if they are not required to comply with any other financial reporting standards. Finally, there is also application guidance specifically designed to assist micro entities to apply IFRS for SMEs.

Under the Auditing Profession Act of 2005, the Independent Regulatory Board for Auditors (IRBA) is responsible for the adoption of auditing standards in South Africa. The IRBA has adopted ISA as issued by the IAASB without modifications and including effective date. The IRBA may also develop and issue its own authoritative pronouncements with regards to auditing and other professional standards that are consistent with the principles of the international standards but adapted to meet local requirements. The IRBA indicates that its continued adoption and prescription of the ISA is effected by gazetting periodic IRBA Board Notices.

Audits of financial statements may only be performed by Registered Auditors (RAs) under the Auditing Profession Act of 2005. The Companies Act of 2008 requires all public companies (listed and non-listed), stated owned companies, certain non-profit companies, and all private and personal liability companies with a public interest score equal to or above 350 to be audited by an RA. Companies with a public interest score between 100 and 349 and have their financial statements internally compiled are also legally required to undergo an external audit, which must be conducted by a RA. According to the Companies Act, companies with a public interest score between 100 and 349 whose financial statements are independently compiled and reported do not have a legal obligation for an external audit. These companies are only required to have their financial statements reviewed by independent reviewers. Nonetheless, only IRBA-Registered Auditors are authorized to act as independent reviewers for companies with a public interest score above 100 points. Independent reviews need to be conducted in terms of International Standard on Review Engagement (ISRE) 2400 (as issued and revised from time to time). Companies with a public interest score of less than 100 are permitted to have the independent review conducted by a Registered Auditor, Chartered Accountant as defined in the Chartered Accountants Designation (Private) Act 67 of 1993, or person who qualifies to act as an “accounting officer,” as defined by the Close Corporations Act.

The Banks Act 1990 stipulates financial reporting and auditing requirements for banks. The Banks Act requires that banks register as a public company before beginning operations. Accordingly, given a banks’ public interest score, banks are required under the Companies Act 2008 to prepare financial statements in accordance with IFRS and are subject to annual audits. The Registrar of Banks at the Reserve Bank of South Africa also issues regulations requiring additional disclosures in financial statements by banks. According to the Banks Act, the Registrar must approve the appointment of a bank’s external auditor.

The Financial Services Board was created in 1990 under the Financial Services Board Act to regulate non-bank financial services companies. As such, it has broad authority over the Johannesburg Stock Exchange (JSE), pension funds, and insurance companies, among others.

The Johannesburg Stock Exchange (JSE), however, is a self-regulatory body that establishes its own reporting requirements for listed companies. The JSE requires all publicly listed companies to prepare annual financial statements in accordance with IFRS. In addition, the Financial Markets Act of 2012 also stipulates additional disclosure requirements for listed companies related to the company’s compliance with standards of corporate governance. This is encapsulated in the King IV Report on Corporate Governance for South Africa 2016.

The accountancy profession in South Africa is largely regulated at the professional level, except for Registered Auditors (RAs). The Independent Regulatory Board for Auditors (IRBA) is responsible for regulating all RAs in the country in accordance with the Auditing Profession Act 2005.

The responsibilities of the IRBA are to: (i) investigate alleged improper conduct by RAs; (ii) establish an investigative and disciplinary system for RAs; (iii) conduct quality assurance reviews; (iv) set auditing standards; (v) maintain a registry of RAs; (vi) set additional initial professional development requirements to become an RA; and (vii) take steps it considers necessary to protect the public in their dealings with RAs.

To practice publicly and offer audit services as a RA, individuals must hold the designation of Chartered Accountant (CA(SA)) by being a member of South African Institute of Chartered Accountants (SAICA) in accordance with the Chartered Accountants Designation Act No. 67 of 1993 and must pass IRBA’s additional requirements. This includes completing an Audit Development Program (ADP) before being able to register with the IRBA. As part of the ADP, individuals are required to complete practical experience requirements that consist of a minimum of 18 months in an audit and assurance environment and 1,500 productive hours in audit and assurance and submit a portfolio of evidence upon completing the ADP demonstrating competencies in the area of audit and assurance.

Financial statements of listed companies must be audited in accordance with ISA by a Johannesburg Stock Exchange (JSE)-approved auditor. To qualify as an accredited auditor, the firm must (i) be registered with IRBA, (ii) have demonstrated experience in auditing listed companies, and (iii) have a minimum of three partners. One partner must have demonstrated knowledge of the JSE, and one must be a specialist in IFRS. Audit partners are required to undergo mandatory training in JSE listing requirements.

In addition, the JSE and the Companies Intellectual and Property Commission (CIPC) also have quality assurance arrangements for RAs of listed companies and independent reviewers, respectively. The JSE monitors audits of listed companies and its process is linked to the IRBA’s QA review system while professional accountancy organizations (PAOs) whose members can perform independent reviews of financial statements must annually submit a report to the CIPC demonstrating that it has proper mechanisms in place.

Finally, according to the Banks Act, the Registrar must approve the appointment of a bank’s external auditor.

As mentioned above, there is no overall national supervision for professional accountants. Professional accountants may be subject to education, training, and examination requirements by voluntarily joining one of the twelve PAOs in South Africa.

In accordance with the Close Corporations Act 1984, the Association of Chartered Certified Accountants—South Africa, Chartered Institute of Business Management, Chartered Institute of Management Accountants—South Africa, Institute of Accounting and Commerce, South African Institute of Business Accountants, South African Institute of Chartered Accountants, South African Institute of Government Auditors, South African Institute of Professional Accountants, Southern African Institute of Chartered Secretaries and Administrators are recognized by the CIPC as professional bodies whose members are authorized to serve as accounting officers for close corporations. The abovementioned institutes in addition to the Association of Accounting Technicians, the Institute of Certified Bookkeepers, and the Institute of Internal Auditors are recognized by the South African Qualifications Authority (SAQA), an entity established under the National Qualifications Framework Act 67 of 2008. SAQA is responsible for overseeing the quality assurance, standardization, and maintaining a registry of all accredited training providers that wish to have national qualifications registered and monitored as well as a records database of qualified practitioners. The SAQA only focuses on an organization’s professional qualifications and not on other elements that may define a PAO.

Each organization offers its own qualification which, according to the World Bank, generally encompass the principles laid out in the IES. Only two South Africa-based PAOs are members of IFAC and subject to IFAC’s Statements of Membership Obligations (SMOs). These are: the South African Institute of Chartered Accountants (SAICA) and the South African Institute of Professional Accountants (SAIPA). The branches of the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Management Accountants (CIMA) are also subject to their respective UK-based organizations’ requirements. ACCA-UK and CIMA-UK are IFAC members, and their education, training, and examination requirements are in line with the IES.

Candidates for the designation of Chartered Accountant (CA(SA)) and membership in the South African Institute of Chartered Accountants (SAICA) must have a bachelor’s degree and complete a Certificate in Theory of Accounting (CTA) (a one-year post graduate course focused on in accounting, auditing, tax, and financial management) from a SAICA-accredited university, complete a three-year training contract with a registered training office, pass SAICA’s qualifying examinations, and then register with the SAICA. SAICA is responsible for setting ethical as well as initial and continuing professional development requirements for its members and establishing an investigative and disciplinary system for its members.

Candidates for the qualification of Professional Accountant (PA (SA)) and membership in the South African Institute of Professional Accountants (SAIPA) must have a bachelor’s degree that includes core accountancy subjects from a SAIPA-accredited tertiary education provider, complete a three year training contract with a SAIPA-approved training office or have six years of relevant, verifiable work experience or complete a training program from an accredited professional accountancy body, pass SAIPA’s qualifying examinations, and register with SAIPA. Under the revised Companies Act 2008, SAIPA members are permitted to conduct independent reviews of companies with a public interest score less than 100. SAIPA’s responsibilities are similar to those of SAICA.

Auditors in South Africa are regulated by the Independent Regulatory Board for Auditors (IRBA) in accordance with the Auditing Profession Act of 2005 and by the South African Institute of Chartered Accountants (SAICA). Only individuals that are recognized as Chartered Accountant (CA(SA)) by being a member of SAICA in accordance with the Chartered Accountants Designation Act No. 67 of 1993 are eligible to register as Registered Auditors (RAs) with the IRBA, subject to the IRBA’s additional requirements, including the completion of an Audit Development Program (ADP) and provisions for continuing professional development (CPD).

The responsibilities of the IRBA are to: (i) investigate alleged improper conduct by Registered Auditors (RAs); (ii) establish an investigative and disciplinary system for RAs; (iii) conduct quality assurance reviews; (iv) set auditing standards; (v) maintain a registry of RAs; (vi) set additional initial professional development requirements to become an RA; and (vii) take steps it considers necessary to protect the public in their dealings with RAs.

Additionally, SAICA is responsible for setting ethical as well as initial and continuing professional development requirements for its members and establishing an investigative and disciplinary system for its members.

IRBA is a member of the International Forum of Independent Audit Regulators (IFIAR).

There are 12 professional accountancy organizations (PAOs) in South Africa.

The Association of Chartered Certified Accountants—South Africa (ACCA-South Africa)

ACCA-South Africa is a local subsidiary of the ACCA UK-based body for professional accountants. ACCA South Africa has approximately 400 members who are required to meet high-level membership requirements, which are adopted at the global level. The ACCA qualification is accredited under the National Qualification Framework (NQF). Members of ACCA may serve as accounting officers, but they are not accredited to offer audit services. ACCA is involved in the development of the profession in South Africa by sharing good practices at the local level and developing partnerships with local tertiary institutions. ACCA-UK is a member of IFAC.

Chartered Institute of Business Management

The Chartered Institute of Business Management is a subsidiary body of Chartered Secretaries Southern Africa (CSSA). It is not an examining body but rather was set up to provide professional membership benefits to students while they progress along the CSSA courses until they have passed and become graduates of the Institute (GradICSA). The major difference is that students will be entitled to apply for membership of the Chartered Institute of Business Management at various levels after passing a minimum of five CSSA modules or if exemptions are granted and apply the appropriate title after their names. Members of other professional bodies, university graduates or holders of National Diplomas can qualify to apply for a higher level of Chartered Institute of Business Management membership by studying for the CSSA programs. CIBM is not an IFAC member.

Chartered Institute of Management Accountants—South Africa (CIMA-South Africa)

CIMA-South Africa is a local subsidiary of the UK-based CIMA, a membership organization for management accountants. CIMA-South Africa’s membership includes over 1,600 professionals and its qualification is accredited under the NQF. Members of CIMA-South Africa may serve as accounting officers, but they are not accredited to offer audit services. CIMA is involved in the development of the profession in South Africa by sharing good practices at the local level and developing partnerships with local tertiary institutions. CIMA-UK is a member of IFAC.

Institute of Accounting and Commerce (IAC)

The Institute of Accounting and Commerce (IAC) was established in 1927 as a provider of distance learning education and professional accounting and management institute. It is now registered as a professional accounting institute and specializes in the registration of accounting officers in terms of the Close Corporations Act. Its mission is to promote formal learning and the highest professional standards of its members and lead the assessment and practice of business and public management in Africa. The Institute’s head office is in Cape Town and its membership is mainly South Africa-based but the Institute has members in Namibia, Zimbabwe, Botswana and Swaziland. IAC is not an IFAC member.

South African Institute of Business Accountants (SAIBA)

SAIBA was established in 1987 and its members were granted accounting officer status in 1996. Today, it is a voluntary accounting membership body with more than 6,500 members. Members fall into membership tiers, according to experience and qualifications. More than fifty percent of members are employed in business, the public sector or academia. The remainder manage their own accountancy practices within the private sector. SAIBA supports its members by adopting and implementing international standards relating to ethics, quality, education, financial reporting, assurance, and other engagements. SAIBA enables the sharing of knowledge and assists members in understanding all areas affecting accountants and financial professionals. SAIBA is not an IFAC member.

South African Institute of Chartered Accountants (SAICA)

SAICA is a South-African based PAO formally established in 1980. SAICA is responsible for setting ethical as well as initial and continuing professional development (CPD) requirements for its members and establishing an investigative and disciplinary system for its members. Only SAICA members with the designation of CA(SA) are eligible to register as Registered Auditors (RAs) with the IRBA, and if admitted, they are authorized by to offer audit services in South Africa and are subject to full regulation by the IRBA. In addition to being a member of IFAC, SAICA is a member of the Pan African Federation of Accountants (PAFA). It frequently collaborates with IRBA, SAQA, and SAIPA to drive the development of the accountancy profession.

Southern African Institute of Government Auditors (SAIGA)

SAIGA was founded on July 27, 1988. The objectives of the Institute are broadly defined and encompass the promotion of the members’ interests by advancing accountability and auditing. Since the principles of government auditing are based on the generic principles of auditing, the Institute strives to promote auditing in its wider context. Its professional designation of “Registered Government Auditor” are recognized as a professional body by the South African Qualifications Authority (SAQA) for the purposes of the NQF Act. The Auditor-General South Africa (AGSA) recognized the RGA qualification as a professional qualification in the Auditor-General Office. SAIGA is not an IFAC member.

South African Institute of Professional Accountants (SAIPA)

SAIPA is a South African-based PAO formally established in 1982 and its responsibilities are similar to those of SAICA. It is a voluntary membership organization for professional accountants who offer accountancy, tax, and independent review services. Only SAIPA members may use the designation of PA(SA). In addition to being a member of IFAC, SAIPA is a member of the PAFA. It frequently collaborates with IRBA, SAQA, and SAICA to drive the development of the accountancy profession.

Southern African Institute of Chartered Secretaries and Administrators (CSSA)

Chartered Secretaries Southern Africa is the formal professional Institute for the enabling of corporate governance and company secretaryship as well as the expert commentator and thought leader in Southern Africa on governance matters. It is a recognized qualification for the accounting officer post required in terms of Close Corporation legislation. CSSA is the professional qualifying body for Chartered Secretaries offering an international qualification recognized in more than 70 countries. The career-long program of study comprises attainment of professional qualifications and requires continuing professional development (CPD), which ensures that members remain on the cutting edge of developments. CSSA represents Botswana, Lesotho, Namibia, South Africa and Swaziland. The CSSA is not an IFAC member.

Association of Accounting Technicians—South Africa (AAT-South Africa)

AAT-South Africa is a local subsidiary of the UK-based AAT. AAT offers vocational accountancy and finance qualifications, which are recognized by the South African NQF. AAT-South Africa members mainly offer accountancy services but not are authorized by the CIPC to serve as accounting officers for close corporations. AAT-UK is a member of IFAC.

The Institute of Certified Bookkeepers (ICB)

The Institute of Certified Bookkeepers was established in 1931. Its role is to improve and maintain the quality, credibility and reputation of bookkeeping, accounting, office management and financial management training and qualifications in southern Africa. As a Quality Assurance Service Provider (QASP) of the Finance and Accounting Services Sector Education and Training Authority (FASSET), the ICB is an examining and certification body for several of FASSET’s business qualifications. All ICB qualifications are accredited on the NQF by the South African Qualifications Authority (SAQA) and the Zambian Vocational Qualifications Framework. ICB is not a member of IFAC.

Institute of Internal Auditors (IIA South Africa)

The IIA SA is part of an international network representing the interests of Internal Auditors worldwide. As a part of this international network, the IIA SA upholds and supports the fundamental tenets of the profession - the Code of Ethics and the International Standards for the Professional Practice of Internal Auditing. The IIA SA supports the profession by providing a wide range of services dedicated to the education and advancement of internal auditors and dynamically promoting and developing the profession in South Africa. The IIA SA’s objectives are to build the profession, its credibility, and a thriving business environment in South Africa. The IIA is not a member of IFAC.

In 2013, the World Bank assessed accounting and auditing practices in South Africa. The resulting Report on Observance of Standards and Codes (ROSC) concluded that there was no overall national supervision and regulation of the professional accountancy profession to ensure that it serves the public interest. The ROSC recommended that while each PAO would continue to support and regulate its members, the proposed regulatory body should ensure that the education and training offered by PAOs is appropriate to the types of services being offered by the PAO membership. The regulatory body would accredit, register, monitor, and sanction the PAOs, as well as monitor compliance in accordance with the accreditation criteria on an ongoing basis. It was further recommended that the regulatory body would assume the existing IRBA functions, thereby providing for the comprehensive regulation of the whole accountancy profession.

The South African Institute of Professional Accountants and the South African Institute of Chartered Accountants indicate that the South African National Treasury is working to address this issue and as of the date of the assessment, is still finalizing an approved model for the regulation of the PAOs. The process has been temporarily delayed owing to various factors, including the appointment of a new Accountant-General (at present there is an Acting Accountant-General), the appointment of a new Finance Minister and the effect of the municipal elections in South Africa.

Under the Auditing Profession Act of 2005, the Independent Regulatory Board for Auditors (IRBA) is responsible for establishing a mandatory quality assurance (QA) review system for auditors and firms for all statutory audits. South African Institute of Chartered Accountants (SAICA) indicates that the IRBA has established a QA review system in line with the requirements of SMO 1.

The Companies Act 71 of 2008, effective in 2011, introduced independent reviews for companies with a certain public interest score instead of requiring a statutory audit. Only CA(SA)s and RAs can perform independent reviews of qualifying companies with a public interest score of 100 or more, whereas the members of eight other PAOs are also allowed to perform independent reviews where the public interest score of a company is less than 100.

SAICA indicates that its members who are not subject to QA reviews by the IRBA are required by SAICA to use and comply with ISQC 1, and the relevant engagement standards issued by the IAASB and issues of non-compliance with professional standards are addressed by its investigation and discipline system.

Current Status: Adopted

Each professional accountancy organization in South Africa offers its own qualification and establishes its own initial professional development (IPD) and continuing professional development (CPD) requirements. In turn, these bodies must be recognized by the Companies Intellectual and Property Commission (CIPC) for members to serve as accounting officers for close corporations and their respective qualifications must be recognized by the South African Qualifications Authority (SAQA), an entity established under the National Qualifications Framework Act 67 of 2008. SAQA is responsible for overseeing the quality assurance, standardization, and maintaining a registry of all accredited training providers that wish to have national qualifications registered and monitored as well as a records database of qualified practitioners.

Candidates for the designation of Chartered Accountant (CA(SA)) and membership in the South African Institute of Chartered Accountants (SAICA) must fulfill SAICA’s academic, practical experience, and examinations requirements and complete mandatory CPD as part of maintaining their membership. SAICA reports its IPD and CPD requirements are in line with the latest (2019) IES.

Only CA(SA)s are authorized to provide audit services after fulfilling the additional IPD requirements set by the Independent Regulatory Board for Auditors (IRBA) and registering as Registered Auditors (RA). SAICA reports that the IRBA also evaluates RA’s CPD and imposes other requirements to ensure alignment with IES 8.

Candidates for the qualification of Professional Accountant (PA (SA)) and membership in the South African Institute of Professional Accountants (SAIPA) must complete SAIPA’s academic, practical experience, and examinations and also complete CPD. SAIPA states that its IPD and CPD requirements are aligned with the latest (2019) IES and the principles established by SAQA.

ACCA-South Africa’s members are required to meet high-level membership requirements, which are adopted at the global level by the UK-based headquarters. The ACCA’s IPD and CPD requirements are in line with the 2019 IES and its qualification is accredited under the South African National Qualification Framework (NQF).

Similarly, CIMA-South Africa’s members are required to meet the requirements established by its UK-based headquarters. CIMA’s IPD and CPD requirements incorporate the IES, and its qualification is accredited under the South African NQF.

There is limited information regarding the other PAOs’ IPD and CPD requirements (which are not IFAC members) and their incorporation of the IES requirements.

Current Status: Partially Adopted

Under the Auditing Profession Act of 2005, the Independent Regulatory Board for Auditors (IRBA) is responsible for the adoption of auditing standards in South Africa. The IRBA has adopted ISA as issued by the IAASB without modifications and including effective date for all mandatory audits. The South African Institute of Chartered Accountants (SAICA) additionally reports that the IRBA has adopted without modification, the entire suite of International Standards issued by the IAASB, namely ISQC 1, ISA, ISRE, ISAE, and ISRS.

International Standard on Review Engagement (ISREs) have also been adopted for application in independent reviews of companies with a public interest score between 100 and 349 whose financial statements are independently compiled and reported as well as companies with a score of less than 100.

Current Status: Adopted

Ethical requirements for Registered Auditors (RAs) are set by the Independent Regulatory Board for Auditors (IRBA) in accordance with the Auditing Profession Act of 2005. The South African Institute of Chartered Accountants (SAICA) reports that in 2010, the IRBA adopted the IESBA Code of Ethics as the IRBA Code of Professional Conduct for Auditors (the IRBA Code) with additional requirements for auditors in South Africa. IRBA has adopted the revisions and restructuring issued in the 2018 International Code of Ethics. SAICA notes that modifications are made to the IESBA Code only to address local issues not specified in the IESBA Code.

Other professional accountants may be subject to ethical requirements established by professional accountancy organizations (PAOs).

The South African Institute of Chartered Accountants (SAICA) is responsible for setting ethical requirements for its members. SAICA adopts the IESBA Code of Ethics as issued as the SAICA Code of Ethics. SAICA states that it may modify its Code for local contexts but does not change any of the requirements of the IESBA Code. SAICA also reported that its Code is consistent with the IRBA Code. SAICA members who are RAs must comply with both Codes.

The South African Institute of Professional Accountants (SAIPA) is responsible for setting ethical requirements for its members as a recognized professional body by the South African Qualifications Authority (SAQA). SAIPA states that its Code of Ethics is aligned with the 2020 IESBA Code of Ethics.

There is limited information regarding the ethical requirements, if any, of the remaining PAOs in South Africa that are not IFAC members.

Current Status: Partially Adopted

The Accounting Standards Board (ASB) is the entity responsible for adopting public sector accounting standards in South Africa. The ASB has adopted the Generally Recognized Accounting Practice (GRAP), which mostly align with accrual-basis IPSAS; however in practice most government departments are applying a modified cash basis of accounting while the National Treasury is developing a roadmap to implement accrual accounting across all departments (IFAC, CIPFA 2020).

Current Status: Partially Adopted

The investigation and discipline (I&D) of Registered Auditors (RAs) is carried out by the Independent Regulatory Board for Auditors (IRBA) in accordance with the Auditing Profession Act of 2005. IRBA’s Inspections Department refers cases to its Investigations Department. Subsequently, the Investigations Department can refer the case to IRBA’s Legal Department. If the case warrants sanctions, the case is also referred to the South African Institute of Chartered Accountants (SAICA). SAICA indicates that the IRBA’s I&D system for Registered Auditors (RAs) is in line with the SMO 6 requirements.

I&D procedures for other professional accountants in South Africa are carried out by their respective professional accountancy organizations (PAOs). SAICA is responsible for establishing an I&D system for its members. It has established a Professional Conduct Committee and Disciplinary Committee, both chaired by members of the legal profession. SAICA indicates its disciplinary procedures are only concerned with the professional behavior of SAICA members to avoid an overlap of responsibilities with the IRBA. SAICA refers complaints of RAs to the IRBA and reports on any findings and sanctions issued by the IRBA regarding its members. SAICA reports that its I&D system is in line with the revised SMO 6 requirements.

The South African Institute of Professional Accountants (SAIPA) is responsible for maintaining an I&D system for its members as a recognized professional body of the South African Qualifications Authority (SAQA). SAIPA reports it has established an Investigation Committee and a Disciplinary Committee as well as an Appeals Tribunal. An attorney is responsible for reviewing and updating the disciplinary policies every three years to ensure they incorporate the SMO 6 requirements. In 2016, SAIPA reviewed its I&D system against the components of SMO 6 and confirmed that its system is in line with the requirements.

There is limited information regarding the I&D systems of other PAOs in South Africa, which are not IFAC members, to determine if they are in line with SMO 6 requirements.

Current Status: Partially Adopted

The Companies Act 2008, effective as of 2011, codifies the application of IFRS as issued by the IASB and approved by the Financial Reporting Standards Council (FRSC) by listed companies, and prescribes either IFRS or IFRS for Small- and Medium-sized Entities (SMEs) for different types of companies based on a public interest scoring system.

A company’s public interest score is determined by the total number of points it receives based on the number of employees, third party liabilities, turnover, and shareholders. State-owned companies and certain non-profit companies are also required to use IFRS. Public companies that are not listed on an exchange as well as private companies, and certain non-profit companies that have a public interest score of at least 100 points may choose to apply full IFRS or IFRS for SMEs. SMEs with a public interest score under 100 points whose financial statements are internally compiled can use their own accounting policies if they are not required to comply with any other financial reporting standards.

There is also application guidance specifically designed to assist micro entities to apply IFRS for SMEs.

Current Status: Adopted

Relevant Organizations

Companies Intellectual Property Commission (CIPC)

Independent Regulatory Board for Auditors (IRBA)

International Forum of Independent Audit Regulators (IFIAR)

South African Institute of Chartered Accountants (SAICA)

South African Institute of Professional Accountants (SAIPA)

South African Qualifications Authority (SAQA)

Relevant Legislation

Auditing Profession Act 2005

Chartered Accountants Designation (Private) Act 67 of 1993

Companies Act 2008

SAICA By-Laws

SAICA Constitution

SAIPA By-Laws

SAIPA Constitution

Relevant Publications

IFRS Foundation, IFRS Application Around the World?Jurisdictional Profile: South Africa, June 2016.

IFIAR, 2021 Member Profile: South Africa, n.d.

SAICA, SMO Action Plan

SAICA, Annual Report, April 2015.

SAIPA, SMO Action Plan

World Bank, Report on the Observance of Standards and Codes—Accounting and Auditing: South Africa, June 2013.