Financial Statements

Choose Excellence: Our Financial Statement Drafting Services

Financial statements are like the health check-up reports for your business, showing how well it’s doing money-wise and if it is still a going concern. In South Africa, making these reports is a regulatory requirement and must-do to follow both the world and local rules of handling business finances. These reports are super important for different groups like the South African Revenue Services (SARS) and the Companies and Intellectual Properties Commission (CIPC), and even banks and financiers.

So what is Financial Statements and why are they so important for companies to do? Let’s break it down:

Think of financial statements in South Africa, as a big collection of financial data that are prepared in accordance with International Financial Reporting Standards (IFRS) rules and local regulations set by bodies like the South African Institute of Chartered Accountants (SAICA).These financial statements include:

  • Income Statement: It’s like a summary of how much money the company made, spent, and kept as profit over a certain time.
  • Balance Sheet: This is a snapshot showing what the company owns, owes, and how much money the owners have in the business at a certain date.
  • Cash Flow Statement: This tells you about the money coming in and going out of the business during a period.
  • Notes to Financial Statements: These are extra details that help everyone understand the numbers better.

Whether you need a one-off quote to get your books up to date and drafting of your Annual Financial Statements, or if you require these services twice a year or even quarterly, you can count on Petersen Business Solutions as your dependable accountant and advisor to get it done for you!

financial statement QUOTE
Why They’re Important?
  • SARS: To make sure businesses are compliant and pay the correct taxes
  • CIPC: To keep businesses transparent and trading fairly
  • Bank & Financial institutions: Lend money based on financial stability
  • Shareholders: Decision making on financials. Declare dividends etc.
Types of Financial Statements
  • Compilation of Annual Financial Statements
  • Review of Annual Financial Statements
More about Financial Statements

What are the different types of Financial Statements and which one is applicable to my business?

Understanding the types of financial statements and the role of the Public Interest (PI) Score is essential for businesses in South Africa, for transparency and regulatory compliance.

Types of Financial Statements:

  1. Compilation Reports: A straightforward snapshot of a company’s finances without assurance on accuracy.
  2. Review Engagements: A higher level of assurance by having an independent accountant examine the plausibility and accuracy of the financial statements.
  3. Audited Financial Statements: The highest level of assurance achieved by a thorough examination by an independent auditor, ensuring accuracy in the financial report.

The PI Score: The PI Score determines a company’s financial reporting obligations.

  1. PI Score Below 100: No prescribed structure and no compulsory audit or review.
  2. PI Score Between 100 and 349: Independently reviewed or audited as per IFRS or IFRS for SMEs.
  3. PI Score Above 350: Mandatory audit as per IFRS or IFRS for SMEs.
  4. PI Score Exceeding 500: Additionally, the appointment of a Social and Ethics Committee is required.

Conclusion: Understanding financial statements and the PI Score is crucial for maintaining compliance and building trust in South Africa. Regardless of its type, each financial statement delivers valuable insights into a company’s financial health and performance.

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