The purpose of this paper is two fold with its focus being on private and not public enterprises:

• To inform members of recent international and local developments with regard to financial reporting – standards used to prepare financial statements – and reporting standards such as auditing; and
• To inform members of how these developments were integrated into submissions made to regulators so as to achieve increased recognition of SAIPA members

IFAC Update provides summaries of IFAC developments over the past month...

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The International Accounting Standards Board met in London on 14 - 18 April, when it discussed IFRS for small and medium-sized entities and other related developments. The discussion of the SME project was educational, and no decisions were made. The objective was to present the findings of the field testing carried out on the exposure draft (ED) of a proposed IFRS for SMEs. At the meeting the staff gave an overview of the demographics of the field testing sample and some of the main problems encountered by the field testers. At a future meeting, staff will make recommendations to the Board for changes based on comments received on the ED and field test results.

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The International Auditing and Assurance Standards Board (IAASB) has amended the following two International Standards on Review Engagements (ISREs) to clarify which standard should be applied to a specific engagement:

• ISRE 2400, Engagements to Review Financial Statements, applies to all reviews of historical financial information by a practitioner who is not the entity's auditor.
• ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, applies in the case of a review by the entity's auditor of interim financial information or other historical financial information.

These amendments, which are effective immediately, are designed to eliminate a small gap in the apparent scope of the ISREs and to ensure that there is no conflict between these standards and International Standard on Assurance Engagements 3000...

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Following the consideration and approval of due process by the Public Interest Oversight Board (PIOB), the International Ethics Standards Board for Accountants (IESBA), an independent standard-setting board within the International Federation of Accountants (IFAC), has issued its 2008-2009 Strategic and Operational Plan

The objective of the IESBA is to serve the public interest by setting high quality ethical standards for professional accountants and by facilitating the convergence of international and national ethical standards, thereby enhancing the quality and consistency of services provided by professional accountants...

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It is a vital part of the process of employment that any employer must ask all the necessary and vital questions at the interview stage in order to ensure that full disclosure is made by the job applicant.If any information is important, the employer must ask the questions of the applicant...

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The introduction of the new Companies Bill, to replace the ageing Companies Act, will promote transparency and corporate governance and align us with international best practice. According to Rudolph du Plessis, partner at Bowman Gilfillan, says the incorporation of companies will be simplified.

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The Close Corporations Act requires that a founding statement (CK1) and an amended founding statement (CK2) must be signed by or on behalf of every person who:

• becomes a member on registration
• is a current member and any changes are registered
• is a person who ceases to be a member or
• is resigning as a member

With the South African economy slowing, lending in crisis and in a state of decline, many Professional Accounting firms across the country will be encountering one of the toughest business environments in years. According to an article from the AICPA, a recession may be exactly the right opportunity for a firm to add new revenue and build market share...

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Sustainability has long been on the list of important topics for professional accountants in business (PAIBs) to consider but, with some exceptions, rarely on their urgent list. Recognising the increasing importance of this subject, the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) considered a plan to increase awareness amongst PAIBs on the subject of sustainability. IFAC published an information paper entitled, “Sustainability – the Role of the Professional Accountant in Business”.

In addition, the PAIB Committee commissioned a leading journalist to conduct a series of telephone interviews, predominantly with professional accountants operating in business throughout the world, to seek their views on the topic...

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The Minister of Finance has gazette the General Financial Services Laws Amendments Bill, 2008, to be introduced in Parliament during the second quarter of 2008. The Bill amends a number of financial sector laws in order of improve efficiency and regulation of the sector. A copy of the draft uncertified Bill is obtainable from the Department's website at http://www.treasury.gov.za . Interested persons and institutions are invited to submit written representation on the Bill to the Secretary to Parliament by no later than 09 May 2008...

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South Africa's reportable arrangements legislation came into force in 2005 and provided for the reporting of two classes of arrangement. The first related to arrangements that resulted in a tax benefit and were subject to an agreement that provided for the variation of interest, fees, etc. if their actual tax benefits differed from the anticipated tax benefits. The second related to certain hybrid debt and equity instruments. The legislation was intended to give the South African Revenue Service (SARS) early warning of arrangements that were potentially tax driven. SARS would then be in a position to take appropriate action to counter abuse more quickly than would otherwise have been the case. Following extended consultations with key commentators on the legislation, the new reportable arrangements legislation contained in section 80M to 80T of the Income Tax Act, 1962, was brought into force on 1 April 2008. SAIPA Your Law Volume 3 Issue 7 pages 20, 21 & 22 contain the new legislation arrangements which commenced on 01 April 2008.

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