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UP-TO-DATE: Keeping you informed of business today

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ACCOUNTING

South Africa maintains its top position for auditing and reporting standards
South Africa has maintained the number one position for its strength of auditing and reporting standards for the sixth consecutive year. Find more information on this ranking in the World Economic Forum’s Global Competitiveness Report 2014–2015.

Revised Headline Earnings Circular issued
Circular 2/2015 – Headline Earnings, which replaces Circular 2/2013 – Headline Earnings, has been issued. The revisions contained in Circular 2/2015 relate primarily to IFRS 9 – Financial Instruments. Circular 2/2015 is effective for financial periods (interim and/or annual periods) ending on or after 31 October 2015. Circular 2/2015 – Headline Earnings can be downloaded from the SAICA website.

Standards issued but not yet effective
Access the list of IFRSs that have been issued but not yet effective from the SAICA website.  The full text of the IFRSs can be accessed from eIFRS.

ASSURANCE

New auditor’s report: SAICA interviewed early adopter of the new and revised auditor reporting standards
Willie Botha (SAICA Senior Executive: Assurance and Practice) talks to Zuleka Jasper (audit engagement partner at Deloitte) and Melt Hamman (CFO at Attacq Limited) in an interview that is available on the SAICA Assurance webpage (www.saica.co.za – Technical – Assurance).

Guide to Compilation Engagements
The International Federation of Accountants (IFAC) released the Guide to Compilation Engagements. The guide aims to help professional accountants in practice, especially those operating in small- and medium-sized practices (SMPs), in conducting compilation engagements in accordance with ISRS 4410 (Revised). This guidance addresses the nature of a compilation engagement, the engagement process (accepting, planning, performing and reporting), and includes examples on compilation engagement procedures and appendices with sample checklists, letters and reports. The guide can be accessed via the SAICA webpage (www.saica.co.za – Technical – Compilation of financial statements).

LEGAL AND GOVERNANCE

SAICA released FAQs on the disclosure of directors’ and prescribed officers’ remuneration
The frequently asked questions have been compiled to assist in the disclosure of directors’ and prescribed officers’ remuneration in terms of the Companies Act 71 of 2008. They can be accessed on the SAICA website.

Employment Equity reporting deadline
All designated employers as defined in the Employment Equity Act 55 of 1998 must, in terms of section 21 of the Act, submit their annual electronic employment equity report by 15 January 2016.

PAIA deadline
The Promotion of Access to Information Act 2 of 2000 (PAIA) requires public and private bodies in terms of sections 14 and 51 thereof to compile and submit manuals on how their records can be accessed. Certain private bodies have been exempt from this requirement. This exemption expires on 31 December 2015. PAIA manuals are required to be submitted to the South African Human Rights Commission via post (SAHRC, Private Bag X2700, Houghton, 2014) or via e-mail to Nomfundo Khulu at Nkhulu@sahrc.org.za.

TAX

Retention of documents
In a recent case, Mr A v CSARS, VAT1129 (5 August 2015), the taxpayer appealed against SARS’s decision to disallow his claim for input tax. The basis for disallowance was that the taxpayer was unable to produce original invoices and relied on unstamped deposit slips, supplier quotations, invoices to vendors other than him, cash sale invoices, and invoices for private consumption supplies. The taxpayer, as part of his appeal, claimed that the SARS official lost the original documentation. However, SARS claimed that it has an inflexible policy which does not permit SARS staff to retain original documents. The judge in this case accepted this argument on this point and ruled in favour of SARS on the basis that the documents required for claiming input VAT, in terms of section 20(4) of the VAT Act, were not furnished by the taxpayer.

It is concerning that the court did not further scrutinise the taxpayer’s claim regarding SARS losing the original documents as, no doubt, many taxpayers and tax practitioners have experienced the same issue and therefore it cannot just be assumed (without further scrutiny) that SARS losing taxpayers documents is an impossibility.

Nevertheless, this case represents a stark warning to taxpayers that keeping your original documents and records and keeping it safe should be a priority, with proper risk and retention procedures for all, both big and small.