Statutory Audits A statutory audit refers to the situation where the entity is required to be audited in terms of the law.
Section 90 of the Act requires.
- a public or state-owned company, upon its incorporation, and each year at its annual general meeting, to appoint an auditor. All public and state-owned companies are therefore required to be audited.
- Any other company whose public interest score in that financial year is 350 or more; or
- Any other company whose public interest score in that financial year is at least 100 (but less than 350) and whose annual financial statements for that year were internally compiled.
Voluntary Audits A voluntary audit refers to the situation where an entity is not required to be audited by either law or regulation, but a decision has been made by either the shareholders, directors or members to undertake an audit of the financial statements.
A private, personal liability or non-profit company may voluntarily elect an audit:
- By including an audit requirement in the company’s memorandum of incorporation;
- By a shareholders’ resolution; or • In terms of a board decision.