1 April 2011 saw the New Consumer Protection Act come into effect. This is a comprehensive act and covers pre-sale offers, sales contracts and post-sale circumstances. All organizations need to be aware of both their rights and obligations so that they know where they stand if certain issues arise. It therefore may be necessary to speak to your organization's attorneys to obtain clarity on issues that are pertinent to yourselves such as for example cancellation of contracts and returns of purchased goods. There are many issues which will need to be clarified over a period of time but it is important that organizations develop their policies on issues in advance before issues arise so that staff knows how to deal with them.
A month later on 1 May 2011 The New Companies Act came into effect. No new Close Corporations can now be formed and existing companies have two years in which to effect certain compulsory amendments, namely the creation of a Memorandum of Incorporation which has certain alterable and unalterable clauses. This new Memorandum of Incorporation replaces the previous company Memorandum of Association and the Articles of Association. Companies should therefore begin the process of creating their new Memorandums of Incorporation by consulting their accountants or attorneys and determining a framework for accomplishing this.
The prime objective of the new Companies Act is to have a flexible act for both large and small entities and consequently doing away with the necessity of two acts as we have had in then past. These were the Companies Act and the Close Corporation Act. While the Close Corporation Act will continue indefinitely inducements will be offered to Close Corporations to convert to companies and as Close Corporations are deregistered for various reasons they will become less of a factor.
Apart from the Memorandum of Incorporation the New Companies Act introduces another two new concepts. 1. The Public Interest Score Concept and 2. The Independent Review. The Public Interest Score concept is applicable not only to companies but also to close corporations. All companies and close corporations must on an annual basis calculate their Public Interest Score (P.I.S.) which is based on 1. Number of employees, 2. Turnover, 3. Amount of unsecured debt and 4. Number of shareholders/members. If the company or close corporation has a score greater than 750 then an audit is required, if the company has a score between 300 and 750 then an independent review must be undertaken by a registered auditor and finally, if the score is below 300 the independent review may be undertaken by an independent accounting professional registered with IFAC (International Federation of Accountants).
In the case of an audit, the auditor expresses an opinion on whether the financial statements fairly present the financial position of the company and its financial performance. In the case of a close corporation the accounting officer states that the financial statements are in agreement with the accounting records but does not express an opinion on the financial position or performance . The Independent Review will fall in between an audit and merely compiling the financials statements from the accounting records and the reviewer will express an opinion as to whether the financial statements fairly present the financial position and performance. The legislation, rules and regulations of this independent review is still very new and will in all probability be refined and extended over the forthcoming months or years. In the same way that a close corporation can elect to have its financial statements audited I am sure that we will see a percentage of close corporations electing to have their financial statements reviewed. A review will however involve additional costs but having the financials statements reviewed may be an important factor for external creditors of loan funds.
At this stage of the year our first Advanced Bookkeeping Programme has been completed and has been a very pleasing experience. Enrolments for the programme was 16 and a new element introduced for the first time was Profit Planning especially incorporating aspects of the Comprehensive Income Statement as is required now in financial reporting. The Comprehensive Income Statement makes it possible to group expenses and therefore facilitates the budgeting process since it is impossible to predict accurately what individual expense items would be in a forthcoming year or period. This programme plays an important role in building the accounting skills, knowledge and depth required of an Accounting Technician.
One aspect of the Independent Review is that the same person who draws up the financial statements cannot do the review. I am sure that what we will see is that if a company or close corporation either wants or has to be reviewed then the financial statements will firstly have to be complied internally or by an external accountant. After which they can be reviewed by an appropriately registered accountant. This means that the accounting skills required by an organization is going to increase and will therefore cost more.
Lastly, in line with its recent past practices SARS now does not issue VAT 201 Return forms but requires that the vendor requests the form. A clear distinction is made between VAT 201 Return forms for manual returns as opposed to efiling forms. VAT 201 Return efiling forms may not be used for manual submissions. And lastly, do not forget that the final date for EMP 502 Returns is 3 June 2011.
Established by Denis Jefferies in 1983, a professional accountant who holds a B.A. in Economics and Law and an M.B.A. (Cape Town), to date the CMD has trained more than 10 000 persons through public and in-house training programs.
Our courses are completely realistic. Trainees actually keep a set of books while attending the course.
Step-by-step testing and auditing ensures that trainees are competent before proceeding to the next stage of the course.
All tasks are completed using the VAT system so that trainees are competent in VAT procedures from a practical point of view.
In all courses the language of instruction is English. Every reasonable attempt is made to accommodate people living with disabilities.
Course fees cover all manuals and materials.
For more information on our 2020 course schedule click here.
For more information on where our courses are held click here.
To enquire about or enrol in any of our courses simply contact Mrs Jefferies during working hours.
A foundation course designed for those who want to keep and maintain the daily, weekly and monthly of books of accounts to the Trial Balance level including VAT procedures.
This Short Learning Program (SLP) follows the Bookkeeping to Trial Balance Course and equips trainees with the skills and knowledge to deal with more complex monthly and year-end procedures.
This SLP integrates with the two previous courses and covers the Financial Statements, Financial Ratios, Business Taxation, Distribution of Profits and Financial Manipulation.
This SLP deals with statutory deductions from the salaries and wages of employees and also statutory returns required by SARS.
Learn how to enter and process transactions over the 12 periods of the financial year using Pastel Partner software.
To enquire about or enrol in any of our courses simply contact Mrs Jefferies during working hours on 021 689 1962 or email email@example.com