IoD Guidelines for Audit Committee Review of Annual Financial Statements

Posted 04 June 2025 Written by Acts Online
Category Regulatory Compliance and Legislation

Brought to you by SA Accounting Academy: In terms of the governance framework established by the King IV Report on Corporate Governance and the statutory obligations under Section 94 of the Companies Act, No. 71 of 2008, the Audit Committee Forum (ACF) has published Position Paper 2 regarding the review of annual financial statements.

The guidance, issued by the Institute of Directors South Africa (IoDSA), provides a structured framework for audit committees to evaluate the integrity of financial reporting. The scope of the paper focuses specifically on the considerations for review and approval of financial statements, rather than a comprehensive list of all committee responsibilities.

The paper details seven items the audit committee should consider before discharging its responsibility for the fair presentation of the financial statements and determining the extent to which they can be relied upon. Key focus areas include:

  • The process for recommending financial statements for board approval;
  • The evaluation of fair presentation in the reporting process;
  • The assessment of the reliability of the financial data; and
  • The discharge of statutory duties related to financial oversight.

Click here to download the ACF Position Paper 2.

What this means for you, your business, or your clients

  • For yourself: Review the ACF Position Paper 2 to identify specific questions you must pose during audit committee meetings to satisfy your individual fiduciary duties under the Companies Act.
  • For your business: Update internal audit and compliance monitoring checklists to include the seven inquiry items identified in the ACF guidance to ensure alignment with King IV governance principles.
  • For your clients: Advise client audit committees to document their consideration of the seven items in their meeting minutes to provide evidence of robust governance oversight during the year-end process.

Originally published at https://accountingacademy.co.za/news/read/iod-guidelines-on-questions-to-consider-before-board-approval-of-afs

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