STANDARDS

standards

Key initiatives to create value in 2022

Taxation

INITIATIVES
  • Advocate to Parliament and National Treasury to provide feedback on matters they do not include in the final Budget Review or Legislation through the Standing Committee on Finance (SCOF)

IMPACT / DIFFERENCE MADE
  • National Treasury has, for the first time, responded to the public regarding submissions that were previously submitted without any response or explanation of why they were not taken into consideration
INITIATIVES
  • Raising awareness with Parliament as to why the budget is incomplete, including:
    • Fiscal risks excluded from the Russia-Ukraine war and the Financial Action Task Force (FATF)
    • Negative report findings from the FATF and lack of government to progress interventions
    • Misalignment of the budget and the appropriation of large amounts to low-impact services such as the SAPS VIP Unit
    • Financial risks due to constant deferral of the implementation of GRAP Accounting Standards since its adoption by government in 2012
    • Lack of proper ‘categorising’ of debt, especially as to guarantees to SoE which are more akin to debt
    • Improper disclosure
    • Valuation of new capital formation spending that including operational costs/replacement assets
    • Exclusion from the budget of known and certain liabilities, namely salary increases, legal liability costs and support to SoEs

IMPACT / DIFFERENCE MADE
  • Parliament engaged National Treasury on the progress of FATF interventions and considered a possible future expanded disclosure of capital formation spending that better informs Parliament of operational costs, replacement capital assets and new capital assets
INITIATIVES
  • SAICA has continued to advocate for the expansion and better alignment to the new reality of home office allowances and for the removal of the arbitrary treatment of the deduction interest on bonds brought about by SARS’s recent change to its interpretation of the law

IMPACT / DIFFERENCE MADE
  • National Treasury have noted their ongoing research into the matter and will release a discussion paper
  • SARS has provided a more detailed explanation of its interpretation, although SAICA still disagrees with its conclusions
INITIATIVES
  • Continued advocacy for a fairer tax system and proper implementation of the medical deductions available for parents of disabled children, including that school fees
  • Continued advocacy to the perceived unlawfulness of the SARS having primary legislative powers that cannot be delegated by Parliament

IMPACT / DIFFERENCE MADE
  • SARS has undertaken to renew its efforts to engage with stakeholders representing the disabled, including parents and school
INITIATIVES
  • Engaging SARS and the Tax Ombud on challenges with refunds being incorrectly withheld for current periods due to audits on previous periods
  • Advocate to SARS to address the numerous challenges experienced by members with SARS’s updated auto assessments process

IMPACT / DIFFERENCE MADE
  • SARS made numerous changes to address these anomalies and held webinars with tax practitioners and taxpayers to better understand the challenges
INITIATIVES
  • Engaging with the IESBA Workgroup of Aggressive Tax Planning and collective through the Global Accounting Alliance Tax Directors Group to explain the profession’s concerns and those of professional bodies with regulating a concept that seems poorly understood and that is not globally aligned
  • To engage SARS on the amended criteria for tax practitioners and Recognised Controlling Bodies (RCB) and its negative impact and to note our concerns as to the lack of a legal instrument in effecting these changes

IMPACT / DIFFERENCE MADE
  • The IESBA Workgroup scheduled a further public consultation after the initial concerns raised and has undertaken to take these concerns into consideration in the exposure draft to be issued in 2023
  • SARS have conceded to some of the concerns including having amended certain proposals and delayed the implementation of others

Key initiatives to create value in 2022

Taxation

INITIATIVES
  • Advocate to Parliament and National Treasury to provide feedback on matters they do not include in the final Budget Review or Legislation through the Standing Committee on Finance (SCOF)

IMPACT / DIFFERENCE MADE
  • National Treasury has, for the first time, responded to the public regarding submissions that were previously submitted without any response or explanation of why they were not taken into consideration
INITIATIVES
  • Raising awareness with Parliament as to why the budget is incomplete, including:
    • Fiscal risks excluded from the Russia-Ukraine war and the Financial Action Task Force (FATF)
    • Negative report findings from the FATF and lack of government to progress interventions
    • Misalignment of the budget and the appropriation of large amounts to low-impact services such as the SAPS VIP Unit
    • Financial risks due to constant deferral of the implementation of GRAP Accounting Standards since its adoption by government in 2012
    • Lack of proper ‘categorising’ of debt, especially as to guarantees to SoE which are more akin to debt
    • Improper disclosure
    • Valuation of new capital formation spending that including operational costs/replacement assets
    • Exclusion from the budget of known and certain liabilities, namely salary increases, legal liability costs and support to SoEs

IMPACT / DIFFERENCE MADE
  • Parliament engaged National Treasury on the progress of FATF interventions and considered a possible future expanded disclosure of capital formation spending that better informs Parliament of operational costs, replacement capital assets and new capital assets
INITIATIVES
  • SAICA has continued to advocate for the expansion and better alignment to the new reality of home office allowances and for the removal of the arbitrary treatment of the deduction interest on bonds brought about by SARS’s recent change to its interpretation of the law

IMPACT / DIFFERENCE MADE
  • National Treasury have noted their ongoing research into the matter and will release a discussion paper
  • SARS has provided a more detailed explanation of its interpretation, although SAICA still disagrees with its conclusions
INITIATIVES
  • Continued advocacy for a fairer tax system and proper implementation of the medical deductions available for parents of disabled children, including that school fees
  • Continued advocacy to the perceived unlawfulness of the SARS having primary legislative powers that cannot be delegated by Parliament

IMPACT / DIFFERENCE MADE
  • SARS has undertaken to renew its efforts to engage with stakeholders representing the disabled, including parents and school
INITIATIVES
  • Engaging SARS and the Tax Ombud on challenges with refunds being incorrectly withheld for current periods due to audits on previous periods
  • Advocate to SARS to address the numerous challenges experienced by members with SARS’s updated auto assessments process

IMPACT / DIFFERENCE MADE
  • SARS made numerous changes to address these anomalies and held webinars with tax practitioners and taxpayers to better understand the challenges
INITIATIVES
  • Engaging with the IESBA Workgroup of Aggressive Tax Planning and collective through the Global Accounting Alliance Tax Directors Group to explain the profession’s concerns and those of professional bodies with regulating a concept that seems poorly understood and that is not globally aligned
  • To engage SARS on the amended criteria for tax practitioners and Recognised Controlling Bodies (RCB) and its negative impact and to note our concerns as to the lack of a legal instrument in effecting these changes

IMPACT / DIFFERENCE MADE
  • The IESBA Workgroup scheduled a further public consultation after the initial concerns raised and has undertaken to take these concerns into consideration in the exposure draft to be issued in 2023
  • SARS have conceded to some of the concerns including having amended certain proposals and delayed the implementation of others

Audit and assurance

INITIATIVES
  • The International Standards on Quality Management (ISQM) which have been published by the International Auditing and Assurance Standards Board (IAASB) and adopted by the Independent Regulatory Board of Auditors (IRBA) in South Africa came into effect on 15 December 2022
  • These standards have the potential to improve audit quality as they prescribe certain requirements that assurance providers need to comply with at firm and engagement level
  • SAICA ran a series of monthly workshops to educate members and other professional bodies across the African continent on how to implement the ISQM standards
  • SAICA entered into an agreement with the Chartered Institute of Accountants Australia and New Zealand (CAANZ) to share resources on ISQM, available to SAICA members on the SAICA website

IMPACT / DIFFERENCE MADE
  • SAICA was invited by IFAC and the World Bank to present to other participants on their ISQM implementation initiatives
  • SAICA resources were made available on the IFAC platform to assist professional bodies across the globe
  • SAICA members have access to global ISQM resources to assist in implementing the standards
  • Effective implementation of the standards may lead to enhanced audit quality, thus promoting credibility in South Africa’s capital markets
INITIATIVES
  • The Audit and Assurance division continues to advocate on behalf of members on proposed and existing legislation that affects SAICA members, such as the proposed amendments to the Financial Intelligence Centre Act which aim to address and prevent the potential grey-listing of South Africa by the Financial Action Task Force (FATF)

IMPACT / DIFFERENCE MADE
  • As part of the advocacy initiatives, SAICA obtained an audience with the Standing Committee of Finance (SCOF) where the issues that may negatively affect members, particularly small and medium practices (SMPs), were raised
  • SAICA continues to address the risks of increased administrative burden on its members because of proposed legislation

Audit and assurance

INITIATIVES
  • The International Standards on Quality Management (ISQM) which have been published by the International Auditing and Assurance Standards Board (IAASB) and adopted by the Independent Regulatory Board of Auditors (IRBA) in South Africa came into effect on 15 December 2022
  • These standards have the potential to improve audit quality as they prescribe certain requirements that assurance providers need to comply with at firm and engagement level
  • SAICA ran a series of monthly workshops to educate members and other professional bodies across the African continent on how to implement the ISQM standards
  • SAICA entered into an agreement with the Chartered Institute of Accountants Australia and New Zealand (CAANZ) to share resources on ISQM, available to SAICA members on the SAICA website

IMPACT / DIFFERENCE MADE
  • SAICA was invited by IFAC and the World Bank to present to other participants on their ISQM implementation initiatives
  • SAICA resources were made available on the IFAC platform to assist professional bodies across the globe
  • SAICA members have access to global ISQM resources to assist in implementing the standards
  • Effective implementation of the standards may lead to enhanced audit quality, thus promoting credibility in South Africa’s capital markets
INITIATIVES
  • The Audit and Assurance division continues to advocate on behalf of members on proposed and existing legislation that affects SAICA members, such as the proposed amendments to the Financial Intelligence Centre Act which aim to address and prevent the potential grey-listing of South Africa by the Financial Action Task Force (FATF)

IMPACT / DIFFERENCE MADE
  • As part of the advocacy initiatives, SAICA obtained an audience with the Standing Committee of Finance (SCOF) where the issues that may negatively affect members, particularly small and medium practices (SMPs), were raised
  • SAICA continues to address the risks of increased administrative burden on its members because of proposed legislation

Corporate reporting

INITIATIVES
  • The International Financial Reporting Standard for Small and Medium-sized Entities Standard is undergoing a review. The proposed amendments to this standard are likely to have a significant impact on entities applying IFRS for SMEs Standards in South Africa. Members are being consulted on the proposals given the significance of the changes and effect thereof on South African SMEs
  • A member of SAICA was appointed during the year to the IASB’s SME Implementation Group (SMEIG) to make recommendations relating to the amendments to the standard
  • SAICA published a template for body corporate financial statements for consultation

IMPACT / DIFFERENCE MADE
  • SMEs in South Africa applying the standard will be impacted and therefore contributing to these important changes is critical to shaping the final amendments to be made
  • This template can assist in standardising the presentation of financial statements within the body corporate sector
INITIATIVES
  • A new standard on accounting for insurance contracts is coming into effect from 2023. SAICA hosted several events for companies targeted at insurers and made several submissions to the global standard-setters on the new requirements

IMPACT / DIFFERENCE MADE
  • Supporting members with the implementation of the new Insurance Contracts Standards and ensure that companies have considered the business impact ahead of the implementation date
INITIATIVES
  • The Sustainability Technical Committee was established and submissions have been made on the draft Sustainability Standards published by the International Sustainability Standards Board (ISSB). A sustainability event was hosted and discussions were held at the United Nations Climate Change Conference

IMPACT / DIFFERENCE MADE
  • SAICA is contributing to the global sustainability standard-setting process, thus shaping the direction of the standards and supporting members in understanding the proposed requirements

Corporate reporting

INITIATIVES
  • The International Financial Reporting Standard for Small and Medium-sized Entities Standard is undergoing a review. The proposed amendments to this standard are likely to have a significant impact on entities applying IFRS for SMEs Standards in South Africa. Members are being consulted on the proposals given the significance of the changes and effect thereof on South African SMEs
  • A member of SAICA was appointed during the year to the IASB’s SME Implementation Group (SMEIG) to make recommendations relating to the amendments to the standard
  • SAICA published a template for body corporate financial statements for consultation

IMPACT / DIFFERENCE MADE
  • SMEs in South Africa applying the standard will be impacted and therefore contributing to these important changes is critical to shaping the final amendments to be made
  • This template can assist in standardising the presentation of financial statements within the body corporate sector
INITIATIVES
  • A new standard on accounting for insurance contracts is coming into effect from 2023. SAICA hosted several events for companies targeted at insurers and made several submissions to the global standard-setters on the new requirements

IMPACT / DIFFERENCE MADE
  • Supporting members with the implementation of the new Insurance Contracts Standards and ensure that companies have considered the business impact ahead of the implementation date
INITIATIVES
  • The Sustainability Technical Committee was established and submissions have been made on the draft Sustainability Standards published by the International Sustainability Standards Board (ISSB). A sustainability event was hosted and discussions were held at the United Nations Climate Change Conference

IMPACT / DIFFERENCE MADE
  • SAICA is contributing to the global sustainability standard-setting process, thus shaping the direction of the standards and supporting members in understanding the proposed requirements

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SAICA Integrated Report 2022.
All Rights Reserved.

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SAICA Integrated Report 2022. All Rights Reserved.

Site Links

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