Accounting and Financial statements fun facts

2018-04-21 - Blockchain, AI, and Accounting - A game-changer in accounting?
Blockchain technology, although most well-known for cryptocurrencies such as Bitcoin, is forecasted to have wide-ranging implications for how data is secured, transmitted, and protected. In addition, the rise of artificial intelligence (AI), and the commercialization of its potential, is already reshaping the work accountants do, the role we play, and what the future holds. Check more here

2018-03-10 - Mark Graham explains what Integrating reporting is all about
Check it here

2018-03-31 - Integrated reporting - South Africa leading the way
"South Africa is the undisputed world leader in IR and we're likely to retain our leadership in the years ahead. " Check more here

2018-02-17 - Tired of financial statements that do not make any sense? Struggling to see whether a company is doing good or bad?
The South African Institute of Chartered Accountants (SAICA) together with a few other NGO's started the Integrated Reporting Committee of South Africa (ICR).

Integrated Reporting enhances the way organizations think, plan and report the story of their business. Organizations use Integrated Reporting to communicate a clear, concise, integrated story that explains how all of their resources create value. Integrated Reporting helps businesses to think holistically about their strategy and plans, make informed decisions and manage key risks to build investor and stakeholder confidence and improve future performance. In simple terms, it explains the financial information in a simple way with the objective that anyone can understand it.

2018-01-06 - Why global accounting standards?
Modern economies rely on cross-border transactions and the free flow of international capital. More than a third of all financial transactions occur across borders, and that number is expected to grow. Investors seek diversification and investment opportunities across the world, while companies raise capital, undertake transactions or have international operations and subsidiaries in multiple countries. In the past, such cross-border activities were complicated by different countries maintaining their own sets of national accounting standards. This patchwork of accounting requirements often added cost, complexity and ultimately risk both to companies preparing financial statements and investors and others using those financial statements to make economic decisions. Read more here

2017-12-16 - IFRS - the global accounting framework
Did you know that South Africa is one of 149 countries around the world that adopted these financial reporting standards. IFRS (International Financial Reporting Standards) have to be applied by listed companies in South Africa, as this is a requirement by the JSE and the Companies Act. Unlisted companies can apply IFRS or IFRS for SME's depending on unique requirements.

2018-01-06 - Benefits of IFRS Standards
IFRS Standards address challenges by providing a high quality, internationally recognized set of accounting standards that bring transparency, accountability, and efficiency to financial markets around the world. Read more here

2017-11-25 - Accounting standards - What does that even mean?
An accounting standard is a guideline for financial accounting, such as how an entity prepares and presents its income, expenses, assets, and liabilities. In South Africa, we are guided by IFRS (International Financial Reporting Standards). It consists of 58 books giving accountants guidance. A typical example of when you will need some of these books for guidance is if your company bought Bitcoins. You will need guidance on whether the Bitcoins should be disclosed as "Cash and Cash equivalents", "Investment Property", "Intangible assets" or any of the other categories.

Tax fun facts

2018-10-12 - VAT and Brown bread
Did you know "brown bread" may be supplied at the zero rate under section 11(1)(j) provided all the following conditions are met: Check more here

2018-09-21 - Individuals - Local rental income from the letting of fixed property
Each rental activity must be captured separately on your income tax return. If you are married in community of property, the SARS system will apply the 50% split.

2018-08-10 - Travel allowance - How to calculate Wear and Tear
The wear and tear allowance must be determined over a period of seven years from the date of original acquisition, and the cost of the vehicle is limited to R560 000. The value of the vehicle (when calculating wear and tear) is usually the cost price, including VAT and excluding finance charges/interest.

2018-08-31 - Employer provided vehicle - other than operating lease
The cash equivalent of the taxable benefit will be reflected on your IRP5/IT3(a) Employee Tax Certificate next to the codes 3802 and/or 3852. The value of the taxable fringe benefit is included in gross income and is equal to the "value of private use" less any consideration paid by the employee to the employer for the private use of the vehicle

2018-07-20 - Travel allowance - What sort of actual expenses can I claim?
  • Maintenance and repairs
  • Insurance and license fees
  • Wear and tear or Lease Payment
  • Other

    2018-06-29 - Travel allowance - How much travel expenses can I claim?
    Travelling expenses may be claimed based on one of the following methods of calculation: - Actual expenses: If you have kept record of your actual expenses, use the receipts in respect of these actual expenses to complete the line items as provided for in the return.
    - Fixed cost rate: If you have not kept records of your actual expenses, SARS will programmatically apply the fixed cost rate to calculate your travel claim.

    2018-06-08 - Travel allowance - Details for your vehicle
    The amount that will be allowed as a deduction will be calculated programmatically by SARS. This calculation can only be done if you supply the following information for each vehicle that you are claiming a travel deduction for the year of assessment:
    • Vehicle registration no.
    • Car make (e.g. BMW or Audi))
    • Car model (e.g.125i for BMW or R8 for Audi)
    • Year manufactured (i.e. which is the year of initial registration of the vehicle)
    • Cost price or cash value

    2018-05-18 - Travel allowance - From where can I claim?
    Expenses incurred by travelling to and from your place of business and your residence are considered private expenses and are therefore not deductible. If you conduct your business from home, your home should (with regard to your travels from there) be treated as your place of business.

    2018-04-27 - Travel allowance - What detail should be on my logbook?
    The following minimum information relating to business kilometers travelled should be reflected on your logbook:
    • Opening kilometers (at the beginning of the tax year or when you starting using the vehicle for business purposes during the tax year)
    • Closing kilometers (at the end of the tax year which is 28 February)
    • Date on which the travel took place
    • The destination to and from
    • The kilometres travelled
    • The reason for the travel

    2018-03-16 - Are you traveling for your business?
    Remember to keep a logbook

    2018-04-06 - Travel allowance - Can I through my logbook away at the end of the year?
    Your logbook and proof of expenses must be retained for a period of five years after the date of submission of the return.

    2018-01-12 - Did you know individuals might also have to register for provisional tax?
    If you are an individual and earning income above your normal salary, you might need to submit and pay provisional tax bi-annually or pay huge annual penalties and interest. For guidance on when to register for provisional tax check SARS's website and make sure you comply with the tax legislation before incurring penalties and interest.

    2018-02-23 - Travel claim allowance
    Did you know source code 3703 on the IRP5/IT3(a) certificate refers to a non-taxable reimburse allowance? You cannot claim any deductions against this allowance. The amount for code 3703 is a reimbursement for business kilometers not exceeding 8 000 kilometers per tax year at a rate which does not exceed the prescribed rate per kilometer (currently 355 cents per kilometer). It should only be used by employers if the employee does not receive any other form of compensation for travel and may not be used together with code 3701 and/or 3702.

    2018-02-02 - Provisional tax return - when should I submit and pay
    In South Africa, provisional tax returns and provisional taxes for companies and for some individuals have to be submitted and paid twice a year, on 31 August and 28 February.

    2017-12-15 - Is your tax consultant a registered tax practitioner?
    Every person who gets paid to file tax returns on behalf of others has to be registered with SARS as a tax practitioner. Tax practitioners also have to be registered with an approved controlling body like the South African Institute of Chartered Accountants. Tax practitioners must participate and comply with the continuing professional development requirements as set by SAICA. Follow below link for more tips on choosing the right tax practitioner here

    2017-12-12 - Ever wondered how much tax do your neighbors in Namibia and Botswana pay
    Check out our updated free tax calculator for individuals to calculate how much tax you will pay for the 2017/2018 tax year. The calculator will also give you interesting insight into the amount of tax you pay by comparing your results to previous tax years as well as neighboring countries.

    2017-12-01 - Personal Income Tax / Individual income tax returns
    In South Africa, the individual year of assessment/tax year runs from 1 March to 28 February. Every year, SARS announces its Tax Season (this is the period during which you are required to submit your annual income tax return). The tax season usually opens on 1 July and ends at the end of November (for individuals not paying provisional taxes) and end of January the next year (for individuals paying provisional tax).

  • Audit fun facts

    2018-07-28 - What are the different audit opinions which my company can get

    2018-08-18 - Will External Audits Vanish in the Blockchain World?
    No! At least not in the immediate future. But like many of the disruptive transformations taking shape around us with everything going digital, external audits cannot stand insulated. Read more here

    2018-07-07 - What is the difference between an independent review and a regulatory audit
    Time taken to finish with an independent review is much less than that of an audit. A review does not require the registered auditor to seek supporting independent evidence or to evaluate the internal controls of a company and therefore it might be cheaper for small businesses. Suppliers may not be happy extending credit to companies without audits, and your credit rating may be affected.

    2018-06-16 - How to calculate the Public Interest Score (PIS) of a company or close corporation
    Points are calculated as follows:

    2018-05-26 - Who can carry out an independent review
    In the case of a company whose public interest score for the particular financial year was at least 100, by a registered auditor, or a member in good standing of a professional body that has been accredited in terms of section 33 of the Auditing Professions Act (SAICA is the only body so accredited at the moment). The effect of this Regulation is that only registered auditors and CA's may perform an independent review of companies with a public interest score of more than 100.

    2018-05-05 - Which companies should be independently reviewed?
    All companies that are not required to have audited financial statements must have their financial statements independently reviewed (with the exception of companies where all the shareholders are also directors and therefore are not required to obtain an audit or a review).

    2018-04-14 - Should my private company be audited (Update 3)
    Any private or personal liability company that has its financial statements compiled by an independent party (such as an external accountant) and that has a Public Interest Score (PIS) of 350 or more should be audited.

    2018-03-03 - Should my private company be audited (Update 1)
    Any private or personal liability company if, in the ordinary course of its primary activities, it holds assets in a fiduciary capacity for persons who are not related to the company, and the aggregate value of such assets held at any time during the financial year exceeds R5 million should be audited.

    2018-03-25 - Should my private company be audited (Update 2)
    Any private or personal liability company that compiles its financial statements internally (for example, by its financial director or one of the owners) and that has a Public Interest Score (PIS) of 100 or more should be audited.

    2018-01-05 - Do other countries also use ISA's
    There are over 93 countries worldwide that adopted and use the international standards on auditing to guide them on the audit quality of financial statements.

    2018-02-10 - Why did South Africa adopt ISA's
    The International Auditing and Assurance Standards Board is an independent standard-setting body that serves the public interest by setting high-quality international standards for auditing, assurance, and other related areas, and by facilitating their adoption and implementation. In doing so, the IAASB enhances the quality and consistency of practice throughout the world and strengthens public confidence in the global auditing and assurance profession.

    2017-12-07 - Mandatory Audit Firm Rotation
    To enhance audit quality and independence between audit firms and companies, starting from 1 April 2023, companies have to appoint a new audit firm once every 10 years at least. Thereafter, the audit firm will only be eligible for reappointment as the auditor after the expiry of at least five financial years.

    2017-12-09 - Audit in Accordance with International Standards on Auditing
    Did you know in South Africa chartered accountants/auditors have to conduct an audit in accordance with International Standards on Auditing referred to as the ISA's. There are over 37 of these ISA books which auditors have to comply with. These ISA's are set by the International Auditing and Assurance Standards Board (IAASB).

    2018-01-01 - How can there be so many ISA's
    The ISA's (International Standards on Auditing), all 37 books, give chartered accountants / registered auditors guidance ranging from the objectives of an independent auditor, quality control for the audit of financial statements, audit documentation, consideration of laws and regulations in the audit of financial statements, audit evidence, audit sampling, going concern tests and much more.

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