South Africa
Corporate Guide

Is there a requirement for a company to appoint an auditor in South Africa?

The following types of companies are required to be audited and therefore must appoint an auditor: 

• state-owned companies;
• public companies; 
• non-profit companies that were incorporated: (i) directly or indirectly by the state, an organ of state, a state-owned company, an international entity, a foreign state entity or a foreign company; or (ii) primarily to perform a statutory or regulatory function in terms of any legislation, or to carry out a public function at the direct or indirect initiation or direction of an organ of state, a state-owned company, an international entity, or a foreign state entity, or for a purpose ancillary to any such function; 
• any profit or non-profit company if, in the ordinary course of its primary activities, it holds assets in a fiduciary capacity for persons who are not related to the company, and the aggregate value of such assets held at any time during the financial year exceeds ZAR 5 million; and
• any other company whose public interest score calculated in terms of the Act is: (i) 350 or more; or (ii) is at least 100 but less than 350 of its annual financial statements for that year were internally compiled. 

Any company that does not fall into these categories may voluntarily elect to be audited in terms of its MOI or in terms of a board or shareholder resolution, in which case such a company will have to appoint an auditor. 

A state-owned company and a public company must appoint an auditor upon incorporation and each year thereafter at its annual general meeting. A company that is required to be audited by the Act or its MOI must appoint an auditor at incorporation, only if the requirement to be audited applied at such time, or at the first annual general meeting at which the requirement to be audited applies, and each annual general meeting thereafter.