Do I Need an Audit?

How the Public Interest Score works

Your Public Interest Score is calculated from four things: the average number of employees during the year, annual turnover, third-party liabilities at year-end, and the number of people with a beneficial interest in the company’s securities. Turnover and liabilities each count one point per full R1 million.

• PIS of 350 or more: a statutory audit is required.
• PIS of 100 to 349: an independent review is usually required – but if your financial statements are compiled internally, an audit is required from a PIS of 100.
• PIS below 100: your company may be exempt if it is owner-managed.

Your Memorandum of Incorporation (MOI) can also require an audit, and so can holding assets in a fiduciary capacity above R5 million – regardless of your score. That is why the calculator asks about both.

Audit or independent review – what’s the difference?

A statutory audit provides the highest level of assurance and is required by the Companies Act for companies with a Public Interest Score of 350 or above. An independent review provides limited assurance and is a more cost-effective option for qualifying companies with a score between 100 and 349. SC Audit’s partners confirm which applies to your company – at no obligation.

Frequently asked questions

Does my company need an audit?

It depends on your Public Interest Score under the Companies Act. Companies scoring 350 or above require a statutory audit. Scores between 100 and 349 require an independent review – or an audit if the financial statements are internally compiled. Below 100, an owner-managed company may be exempt. Your MOI and fiduciary assets can also trigger an audit requirement.

What is a Public Interest Score?

The Public Interest Score (PIS) is a score calculated from your company’s employees, turnover, third-party liabilities and beneficial security holders. It determines which assurance requirements apply to your company under the Companies Act – audit, independent review, or compilation.

What happens if my company doesn’t have an audit when required?

Companies that fail to meet their assurance requirements risk CIPC rejecting their annual financial statements, penalties, and in serious cases deregistration. Directors can also face personal liability. Getting the requirement confirmed early avoids the problem entirely.

How much does an audit cost?

For a small business, an audit typically costs between R15,000 and R50,000, depending on the size of the business and the quality of its records. SC Audit provides a clear, fixed-fee proposal before any work begins.

What is the difference between an audit and an independent review?

An audit provides the highest level of assurance – the auditor gathers sufficient evidence to express an opinion on the financial statements. An independent review provides limited assurance and involves less extensive procedures, which is why it costs less. The Companies Act sets out which one applies to your company.

Prefer to talk it through?

SC Audit’s partners are happy to confirm your audit requirement on a quick call – no obligation. Contact SC Audit or call +27 21 910 1215.