Independent Review
Independent reviews for trustworthy evaluations
As a business owner, you know how critical it is to comply with legal regulations. Being compliant allows your business to grow and helps you avoid penalties and the unpleasant prospect of forced deregistration. However, keeping track of changes to the legal criteria might be difficult.
Which is why independent reviews are so important. Let’s discuss what independent reviews are and how to identify if your business needs them.
Our service
What our independent review services include
At Thryv Accountants, we understand how important it is to have a clear and comprehensive understanding of your company’s financial statements. Independent reviews are one of the best ways for you as a business owner, to streamline your finances, identify any abnormalities in your business procedures, and provide far-reaching benefits during the tax season and when seeking investors for your business.
Our independent review services include:
- An initial assessment and evaluation of your financial statements and every other relevant documentation
- Planning and developing a uniquely tailored action plan based on our assessments. This includes identifying potential risks and understanding your unique financial complexities, creating techniques for your business to get through regulations and compliance laws, reducing costs, and preventing irregularities in the future
- Ongoing data analysis and examination of all financial statements and supporting documents, to ensure your business can smoothly sail through the tax season every year
- A review report is created to detail and outline all our findings in a comprehensive report, which includes our observations, provides recommendations, and a unique conclusion that addresses all concerns found in the independent review
- Clear communication to present our findings to management and stakeholders, discussing the outcomes and possible action plans based on our analysis, and providing valuable insight into the complexities of your finances
- Ongoing support that will ensure you stay informed through every step of the process and have every question or concern addressed and answered
definition
What is an independent review?
An independent review is a process where the independent reviewer provides “Limited Assurance” on a set of annual financial statements.
An independent review is required for most companies in South Africa which are not owner-managed. In all but the smallest companies, a Registered Auditor is required to perform the review.
The new Companies Act, No. 71 of 2008 established independent reviews. They mandate that the yearly financial accounts of certain businesses be independently examined on an annual basis.
We examine supporting papers to ensure that assets and liabilities match the financial statements after the fiscal year. We also use analytical techniques to analyse the company’s financial statements. Experts at Thryv Accountants then report on any differences and follow up on them.
For smaller businesses, independent reviews are utilised in between audits or instead of audits. They are faster and less expensive when employing an independent accounting company for a review. It is a more accessible and cheap choice for many smaller businesses (but it is not a substitute for audits if needed by laws and company law rules).
Summary of independent review services
A type of assurance engagement in which an independent reviewer gives limited assurance on a set of yearly financial statements.
What is limited assurance?
Independent review vs audits: What's the difference?
An audit is not the same as an independent review. An independent review serves to give limited assurance, whereas an audit is intended to provide a higher level of assurance. They are less extensive than an audit, require less detail, and hence cost less to complete.
An independent review gives limited confidence, but an audit provides reasonable certainty that the financial statements are presented fairly and without substantial errors.
The key differences between an audit and an independent review are the costs involved, the level of assurance given, and the details/depth of the financial statement analysis.
Reason
Why do you need an independent review in South Africa?
The primary goal of an independent review is to acquire limited assurance that no major changes should be made to the financial statements and that what was reported is correct.
An independent review adds credibility to your financial statements, especially when they are reviewed by outside parties, such as banks and investors.
Based on the provisions of the Companies Act, an independent review may be required for your company. Even if it is not required, it is strongly advised that most small and medium-sized organisations undertake an independent review.
The processes carried out during a review give all of the evidence necessary in an audit, such as the compilation of annual financial statements. The review processes are investigative and analytical, to gather enough relevant data to support a limited decision on whether the financial statements are prepared in conformity with the law.
Who needs an independent review in South Africa?
Independent reviews are not obligatory for owner-managed profit organisations and are optional if the public interest score is less than 350 and the financial statements are independently generated, or if the public interest score is less than 100.
Where a corporation is not owner-managed, an independent review is necessary. In general, the business is owner-managed if all shareholders are directors.
Essentially, if the company is not governed by all of the shareholders, or if the public interest score determines that the collapse of the business will have a major impact on the public, an independent review is required.
Private enterprises in South Africa will be allowed to replace yearly audits with independent reviews under the new Companies Act. Small businesses can choose the less rigorous and less expensive option of having their financial statements independently evaluated rather than the typical path of an audit.
The new Companies Act requires only public firms to be audited. The new legislation aims to simplify small and medium-sized company regulation, making it less expensive and more accessible to South African businesses.
When do you need an independent review?
Get peace of mind
What are the benefits and advantages of an independent review?
- Independent reviews can help avoid fraud
- Not all discrepancies are deliberate. An independent evaluation may identify practices that might have an impact on the financial statements or have legal ramifications in the future
- An independent assessment will also assist businesses with correct record-keeping by preventing accounting errors from affecting financial accuracy and statements
- Financial audits may assist businesses in streamlining their financial processes and financial reporting procedures
- Cash management can be improved and enhanced with the help of independent evaluations
- Independent reviews are specifically designed to aid and improve the cash management and financial statements of small businesses
- The cost of an independent review is significantly lower than an audit, which was once the only measure a company could use to get a clear understanding of their financial statements
Independent review services In South Africa The benefits of outsourcing with Thryv Accountants
Thryv Accountants can help you through every step of the independent review process, from identifying your Public Interest Score to ensuring your company adheres to every compliance law and regulatory rule in your industry.
You can reach out to us to find out how you can start this process – drop us a message or reach out and schedule a call to discuss any questions or concerns you may have.
