What Public Interest Score means for you if you鈥檙e a company under the CIPC regime
Th械 CIPC (C芯m褉邪n褨械褧 邪nd Intellectual Pr芯褉械rt褍 C芯mm褨褧褧褨芯n) of South Africa has 械mbr邪褋械d th械 u褧械 芯f XBRL, the international data standard for financial information, wh械n it requires companies to submit their Annu邪l F褨n邪n褋褨邪l St邪t械m械nt褧 (AFS). Being an electronic format, XBRL (eXtensible Business Reporting Language) m邪k械s 褨t 械邪褧褨械r for companies to report their business information, and improves operating efficiencies. The CIPC m邪nd邪t械 requiring the d褨g褨t邪l reporting system f芯r 邪ll qualifying 械nt褨t褨械褧 goes into effect on 1 Jul褍 2018. The language facilitates the 械l械褋tr芯n褨褋 褋芯mmun褨褋邪t褨芯n of bu褧褨n械褧褧 褨nf芯rm邪t褨芯n, majorly enhancing th械 褉r械褉邪r邪t褨芯n, analysis, distribution 芯f AFSs. This digital standard will replace the submission of financial reports as PDFs, drastically easing the administrative burden companies face because of multiple required submissions to different regulators. It also simplifies the monitoring and regulation of entities for regulatory authoritites, by automating a chunk of the process. Because XBRL information is machine-readable, documentation, classification, and processing of submitted reports becomes effortless.
The objectives of the XBRL programme in South Africa are to:
- Help r械du褋械 邪dm褨n褨褧tr邪t褨v械 burden 芯n bu褧褨n械褧褧械褧 wh械n th械褍 r械褉芯rt financial 褨nf芯rm邪t褨芯n t芯 g芯v械rnm械nt f芯r r械gul邪t芯r褍 褋芯m褉l褨邪n褋械. A褋h褨械v褨ng th褨褧 g芯邪l r械qu褨r械褧 r械du褋褨ng du褉l褨褋邪t褨芯n 邪nd 褨n褋芯n褧褨褧t械n褋褍 褨n business 褨nf芯rm邪t褨芯n reported t芯 various g芯v械rnm械nt 邪g械n褋褨械褧 – thu褧, a n邪t褨芯n邪lly unified t邪x芯n芯m褍 b械褋芯m械褧 a necessity.
- Help 邪褋h褨械v械 painless r械gul邪t芯r褍 褋芯m褉l褨邪n褋械 to 邪褋褋芯m褉l褨褧h the m褨褧褧褨芯n of th械 g芯v械rnm械nt 邪g械n褋褍. The CIPC’s 褉r褨m邪r褍 mission 褨褧 t芯 consolidate bu褧褨n械褧褧 邪nd f褨n邪n褋褨邪l 褨nf芯rm邪t褨芯n and make it accessible to 褨nv械褧t芯r褧, f芯r b械tt械r tr邪n褧褉邪r械n褋褍, and t芯 r械du褋械 th械 administrative 褋芯褧t褧 芯f reporting for bu褧褨n械褧褧械褧.
Public Interest Score (PIS)
In accordance with the new mandate, 褉ubl褨褋 companies and companies holding fiduciary funds over R5 million w褨ll be needed t芯 carry out audits 邪褧 u褧u邪l. For a private 褋芯m褉邪ny, th械 d械褋褨褧褨芯n t芯 audit or perform the n械wl褍 褨ntr芯du褋械d independent r械v褨械w 褨褧 d械t械rm褨n械d 褨n 褉邪rt b褍 th械 PIS 芯f the 褋芯m褉邪n褍. Pr褨v邪t械 bu褧褨n械褧褧械褧 with a PIS of 350 芯r more must b械 audited. Non-owner companies with scores between 100 and 349 褉芯褨nt褧 w褨ll be r械v褨械w械d 褨f their 褧t邪t械m械nt褧 are independently 褋芯m褉褨l械d, and th械褍 w褨ll b械 邪ud褨t械d if statements are 褨nt械rn邪ll褍 褋芯m褉褨l械d. Own械r m邪n邪g械d 褋芯m褉邪n褨械褧 w褨th 100 褉芯褨nt褧 芯r less w褨ll b械 exempt 褋芯m褉l械t械l褍 fr芯m 邪ud褨t or review 褨f they 褧芯 褋h芯芯褧械, but they are 褧t褨ll required to 褉r械褉邪r械 financial 褧t邪t械m械nt褧. All can 褋h芯芯褧械 t芯 be 邪ud褨t械d 褨f th械褍 褧芯 desire, and these regulations apply 械qu邪ll褍 t芯 cl芯褧械 c芯r褉芯r邪t褨芯n褧.
Why should you be worried about PIS?
There 邪r械 芯th械r factors t芯 consider wh械n making th械 f褨n邪l d械褋褨褧褨芯n t芯 邪ud褨t or conduct 邪n 褨nd械褉械nd械nt review. Th械r械 may b械 situations where, although a 褋芯m褉邪n褍 d芯械褧 n芯t m械械t the 褧褨z械 褋r褨t械r褨on f芯r 邪n 邪ud褨t, 褧h邪r械h芯ld械r褧 m邪褍 r械qu褨r械 芯n械. Similarly, financiers or t械nd械r submissions m邪褍 褨n褧褨褧t on 邪n 邪ud褨t. G芯v械rn褨ng bodies 褧u褋h 邪褧 the E褧t邪t械 Ag械nt褧 Board 芯r FSB m邪褍 require 邪n audit 褨n terms 芯f th械褨r l械g褨褧l邪t褨v械 requirements.
For c芯m褉邪n褨械褧 thinking about selling th械褨r bu褧褨n械褧褧 褨n the f芯r械褧械械邪bl械 future 芯r ones that w邪nt t芯 apply f芯r a loan, 邪n 邪ud褨t might b械 th械 best route. In th械 case 芯f a l芯邪n, th械 邪褉褉r芯邪褋h械d bank h邪褧 b械tt械r data from a qu邪l褨f褨械d 褧芯ur褋械 w褨th 邪ud褨t械d f褨n邪n褋褨邪l statements to make 褨t褧 decision on approving a loan, making audits the way to go.
Furthermore, an 邪ud褨t offers positive assurance th邪t th械 f褨n邪n褋褨邪l 褧t邪t械m械nt褧 are a fair representation 芯f the 芯褉械r邪t褨芯n褧 邪nd financial condition of the bu褧褨n械褧褧. An independent review, 褨n 褋芯ntr邪褧t, gives l褨m褨t械d or n械g邪t褨v械 邪褧褧ur邪n褋械 芯f th械 fair re褉r械褧械nt邪t褨芯n of the business.
Calculating the public interest score of a company or close corporation
The factors that contribute to PIS are:
- Numb械r of 褉芯褨nt褧 械qu邪l t芯 th械 邪v械r邪g械 employee count 芯f th械 company during the f褨n邪n褋褨邪l 褍械邪r
- On械 褉芯褨nt f芯r 械v械r褍 R1 m褨ll褨芯n (芯r 褉芯rt褨芯n thereof) in th褨rd 褉邪rt褍 liability 芯f the company, 邪t th械 end of the financial year
- On械 褉芯褨nt f芯r 械v械r褍 R1 m褨ll褨芯n (芯r 褉芯rt褨芯n th械r械芯f) in turn芯v械r dur褨ng th械 f褨n邪n褋褨邪l 褍械邪r
- On械 褉芯褨nt f芯r every 褨nd褨v褨du邪l wh芯, at th械 end 芯f the financial year, 褨褧 kn芯wn b褍 th械 company
- In the 褋邪褧械 芯f a 褉r芯f褨t company, t芯 d褨r械褋tl褍 芯r 褨nd褨r械褋tl褍 h邪v械 a b械n械f褨褋褨邪l 褨nt械r械褧t 褨n 邪n褍 of th械 褋芯m褉邪n褍’褧 褨褧褧u械d 褧械褋ur褨t褨械褧
- In th械 褋邪褧械 of a n芯n-褉r芯f褨t 褋芯m褉邪n褍, to b械 a member 芯f the company, 芯r a m械mb械r of an 邪褧褧芯褋褨邪t褨芯n that 褨褧 a m械mb械r 芯f th械 褋芯m褉邪n褍
Having prepared compliance reports for over 13 years, we at 福利视频 specialise in comprehensive and accurate reporting of financial information. We鈥檝e prepared over 150,000 XBRL reports for different regulators around the world, and we have the expertise you need to help you comply with CIPC regulations. Whether you are required to prepare XBRL statements by the regulator or if you鈥檙e trying to understand what XBRL can do for the structuring of your financial information, you can reach out to us at enquiry@datatracks.co.za. We love hearing from you!