Accounting standards for SMEs simplified
Small and medium sized businesses, which undertake 70 percent of audits in South Africa, could soon be adhering to simpler accounting standards to ease their administrative burden and lessen their auditing costs, according to the Independent Regulatory Board for Auditors (IRBA).
Chief executive of the IRBA, Kariem Hoosain, said the regulatory body was "in favour of a proposal for simpler accounting standards for small and medium enterprises [SMEs] because it would mean less complex [audits], and therefore should result in cheaper audits for SMEs".
Hoosain said that the IRBA would issue a draft of the new standards early this year.
"The new standard is a significantly shorter document of about 200 pages, as compared to the thousands of pages of the International Financial Reporting Standards, [which are the standards currently used], he said.
Hoosain noted that though the audit process would remain the same, the accounting processes would be simplified. But SMEs would still have to comply with international auditing standards.
It is envisaged that the new SME reporting standards will be issued in the first half of next year," Hoosain said .