Public Interest Score (PIS)
What is the Public Interest Score (PIS)?
The Companies Act, 2008 (Act No 71 of 2008) (Companies Act), together with Regulation 26(2), defines the method for the calculation of a PIS and requires that a PIS is calculated for all companies. As set out in Regulations 26(2), 27-30, 43, 127 and 128 of the Companies Act, the PIS determines:
- Which financial reporting standards apply to a company;
- Whether a company should be audited or independently reviewed in the public interest;
- Whether a company must file a copy of its annual financial statements with the CIPC;
- Whether a company requires a Social and Ethics Committee; and
- The size of the company for purposes of appointing a Business Rescue Practitioner.
Extract from Regulation 26(2)
(2) For the purposes of regulations 27 to 30, 43, 127 and 128, every company must calculate its ‘public interest score’ at the end of each financial year, calculated as the sum of the following:—
(a) a number of points equal to the average number of employees of the company during the financial year;
(b) one point for every R 1 million (or portion thereof) in third party liability of the company, at the financial year end;
(c) one point for every R 1 million (or portion thereof) in turnover during the financial year; and
(d) one point for every individual who, at the end of the financial year, is known by the company––
(i) in the case of a profit company, to directly or indirectly have a beneficial interest in any of the company’s issued securities; or
(ii) in the case of a non-profit company, to be a member of the company, or a member of an association that is a member of the company.
For guidance in calculating your company’s PIS follow the link below:
In summary the following PIS matrix can be used:
Legends
IR = Independent review
MOI = Memorandum of Incorporation
FRS = Financial Reporting Standards
IFRS = International Financial Reporting Standards
IFRS for SME’s = International Financial Reporting Standards for Small-Medium Sized Entities
Always audit if:
- State Owned Company
- Public listed Company
- MOI requires an audit
- Fiduciary assets of company are more than R5 million
| Public Interest Score | Non-Owner Managed | Owner Managed | |||
| Compiled internally | Compiled independently | Compiled internally | Compiled independently | ||
| 350+ | Engagement type | Audit | Audit | Audit | Audit |
| Accounting Framework (FRS) | IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
|
| 100 – 349 | Engagement type | Audit | IR | Audit | Compilation |
| Accounting Framework (FRS) | IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
IFRS or
IFRS for SME’s |
|
| <100 | Engagement type | IR | IR | Compilation | Compilation |
| Accounting Framework (FRS) | No framework unless specified in MOI | IFRS or
IFRS for SME’s |
No framework unless specified in MOI | IFRS or
IFRS for SME’s |
|
Companies / Close Corporations for which Credo Fidei Accounting Services can prepare annual financial statements.