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The Impact of Public Interest Score on Financial Reporting in South Africa

The Public Interest Score, often known as the “PI Score,” is a metric used to gauge public interest in a particular company based on the company’s possible social imprint and prospective public impact. A company’s need for an independent audit or review is determined by its PI Score.

Knowing each company’s PI Score is crucial since it guarantees accurate financial reporting and the observance of sound corporate governance principles. With this information, businesses can decide whether to set up a Social and Ethics Committee and conduct an audit or independently review their financial statements. Let us explore the effects of Public Interest Scores on Financial Reporting.

Decoding the Public Interest Score (PIS)

While calculating the PI Score after each fiscal year, consider the following elements. Below, break down how points can be allocated to each factor to ascertain a company’s PI score. Below is the breakdown of how points can be allocated to each factor to ascertain a company’s PI score.

  1. Employees: Every person who works for the company is given one point. The average number of people employed by the company during the financial year is used for the computation when the number of employees is irregular and varies.
  2. Third-Party Liabilities: The entire sum of the company’s third-party liabilities is determined after its fiscal year. After that, each million rand or part thereof in third-party liabilities the entity owes is appropriately awarded one point.
  3. Turnover: A point is awarded for each million rand, or a fraction, in the company’s gross annual turnover.
  4. Stakeholders: The total number of stakeholders in the company, as determined after each fiscal year, is worth one point. Members of a non-profit organisation are considered stakeholders. On the other hand, persons with both a direct and an indirect beneficial interest in the company’s issued securities are considered stakeholders in profit-making enterprises.

Influence of Public Intrest Score on Financial Reporting in 2024

An audit of the yearly financial statements of a corporation for which the public interest score is 350 or higher throughout a fiscal year is required. The audit process is required if a company’s annual financial statements are generated internally and have a public interest score between 100 and 349 points (inclusive). Annual financial statements are considered “internally compiled” under the Regulations unless prepared by an independent accounting expert using the financial records the company has submitted and in compliance with applicable financial reporting standards.

Knowing each company’s PI Score is crucial since it guarantees accurate financial reporting and the observance of sound corporate governance principles. 

How Can We Help?

DataTracks provides an iXBRL instance solution with both IFRS and GRAP standards. All South African organisations who must convert their Annual Financial Statements from PDF to iXBRL format for CIPC filing can rely on our iXBRL service.

To ensure that your iXBRL report satisfies the CIPC XBRL Taxonomy Architecture, DataTracks provides both iXBRL software and iXBRL tagging services. We assist with the conversion and filing process to guarantee a successful submission with the regulator. We also facilitate the switch to the new CIPC regulatory compliance and recognise and handle the problems associated with iXBRL preparation.

Email us at  enquiry@datatracks.co.za for any enquiries. You can also reach us on +27 10 446 9061.

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