South Africa's chartered accountants are pitching to assist the Financial Reporting Standards Council (FRSC) to maintain our country's pre-eminent global position in auditing and financial reporting standards.
The Financial Reporting Standards Council has now been established in terms of the new Companies Act and completes the alignment of South Africa's company reporting with the International Financial Reporting Standards (IFRS).
Jeff van Rooyen, the FRSC's first Chairman, said that it is the fitting link South Africa needs to the IFRS guidelines as issued by the International Accounting Standards Board (IASB). Van Rooyen is also a Trustee of the IFRS Foundation, the governing body of the IASB. Van Rooyen further states that, “the FRSC will listen to business needs with regard to the issuing of financial reporting standards, but also has a duty to advise the Minister appropriately on matters of financial reporting standards in the country.”
Companies are to adopt IFRS for their accounting requirements, while qualifying smaller companies should adopt IFRS for SMEs.
Sue Ludolph, SAICA's Project Director: Financial Reporting, says that in 2011 SAICA and other stakeholders responded to the Minister of Trade and Industry's call for nominations to FRSC membership. Ludolph comments, “We are delighted that 12 of the FRSC members are chartered accountants [CA(SA)]. This demonstrates the CA(SA) profession is committed to maintaining financial reporting standards”.
The Minister of Trade and Industry to date has appointed 13 of 17 members to the FRSC, which is to replace the Accounting Practices Board (APB) established in 1973. In extending SAICA's congratulations to those appointed, Ludolph says the composition of the Council is a “significant accomplishment for financial reporting in South Africa”.
Moses Kgosana, chairman of the APB, believes that “the calibre of candidates selected will serve South Africa well and stand it in good stead in maintaining its pre-eminent position on the world stage”. He says that the APB will do all that is possible to ensure an orderly transition of the financial reporting standard-setting process in South Africa. The APB is likely to dissolve as a result of the establishment of the FRSC.
Kgosana notes “In the 39 years of its existence, the APB has played a significant role in ensuring that South Africa has been recognised in the international market for having world class financial reporting. The APB was instrumental in harmonising South Africa's accounting standards with international best practice from 1995. The APB decided in 2003 to adopt IFRS as Statements of Generally Accepted Accounting Practice, in order to position the South African capital market as an attractive investment destination”.
“This is no doubt another compelling reason why South Africa has been ranked number one, for the second year in a row, for its auditing and reporting standards by the World Economic Forum's Global Competitiveness Report,” Kgosana concludes. asa