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SAICA and JSE Work Together to Ensure Accounting Compliance

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10 Jan 2003

The South African Institute of Chartered Accountants (SAICA) and the JSE Securities Exchange South Africa (JSE) have established a panel of specialists to ensure that listed companies comply with South African Statements of Generally Accepted Accounting Practice (GAAP). GAAP accords with International Financial Reporting Standards (IFRS).

At present, GAAP does not have legal backing within legislation. Government, in response to SAICA's request to provide legal backing, has drafted legislation in the form of the Financial Services Bill. Currently, all listed companies are obliged by the listings requirements of the JSE to comply with GAAP or IFRS. As the JSE lacks the resources to solely monitor compliance with accounting standards it has partnered with SAICA to ensure that listed companies do comply. The GMP will not review all companies' financial statements but will investigate complaints referred by the JSE that GAAP had not been observed.

SAICA and the JSE will both be vigilant for non-compliance.

The GMP comprises specialists from various business fields with knowledge of GAAP. Complaints will be referred by the JSE to the panel of specialists. The chairman of the GMP will refer the matter to a review committee selected by him from the panel, the members of which will be anonymous for a particular complaint and will report their findings to the JSE listings division. The JSE will use existing structures to address the matter and consider further action.

The JSE can also lodge a formal complaint to the Public Accountants' and Auditors' Board in cases where a Registered Accountant and Auditor acting as an auditor to a company issued an inappropriate audit opinion, and to SAICA, in instances where a SAICA member was involved in the preparation and or approval of the financial statements.

The GMP was launched on 4 September 2002.

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