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Summary COMPANIES: AUDIT REPORTS & PUBLISHED ANNUAL REPORTS
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COMPANIES: AUDIT REPORTS & PUBLISHED ANNUAL REPORTS theory summarized in detail
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Grade 12 Theory Notes: Companies – Audit Reports and Published Annual Reports.COMPANIES: AUDIT REPORTS & PUBLISHED ANNUAL REPORTS
DIFFERENT TYPES OF COMPANY FINANCIAL STATEMENTS:
• ANNUAL FINANCIAL STATEMENTS
• PROVISIONAL ANNUAL FINANCIAL STATEMENTS
• INTERIM OR PRELIMINARY REPORTS
• GROUP AND CONSOLIDATED FINANCIAL STATEMENTS
• FINANCIAL INFORMATION IN A CIRCULAR, PROSPECTUS OR PROVISIONAL ANNOUNCEMENT OF RESULTS
Detailed financial statements of a business entity reflect all:
• Assets, Owners’ Equity and Liabilities
• Income and Expenses
The published financial statements have to reflect certain important information but companies also choose to include other interesting information about
the company which they believe will be interesting and important to the parties who will read their financials.
Important stakeholders interested in the AFS are:
• Shareholders
• Directors
• Other employees of the company/ Trade Unions
• SARS
• Creditors
• Lenders such as banks and other financial institutions.
, Grade 12 Theory Notes: Companies – Audit Reports and Published Annual Reports.
Section 30 of the Companies Act covers auditing of financial statements:
• Public listed companies (LTD)and certain Private companies ((PTY) LTD) are required to have independent audits of their financial statements because of
the high level of public interest;
• Other types of companies, CC, Partnership, Sole Proprietor, may need to undergo an independent review or depending on the size of the business they
could be exempt from either a review or audit.
Our focus is only on AUDITED PUBLISHED ANNUAL FINANCIAL STATEMENTS OF PUBLIC COMPANIES
Companies are required to:
• Prepare published financials every 6 months;
• Publish the AFS within 6 months of the year-end;
• Comply with International Financial Reporting Standards (IFRS), the Companies Act, King Code;
• Pay provisional tax every 6 months based on their interim and final results.
PUBLISHED ANNUAL FINANCIAL STATEMENTS OF PUBLIC COMPANIES essential components are:
MAIN COMPONENTS:
• Independent Auditor’s Report
• Directors Report
• Statement of Comprehensive Income
• Statement of Financial Position
• Cash Flow Statement
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