Information for Auditors
Audit and submission of annual audit reports on trust accounts
Every business property practitioner, who is not in possession of a PPRA-issued trust account exemption letter, must appoint an auditor, who must be registered as assurance with the Independent Regulatory Board for Auditors (IRBA), who must perform an audit of the separate trust accounting records within six months of the financial year end of the business property practitioner.
a. An auditor who performs an audit of the trust account(s) of a business property practitioner must:
validate himself/herself and successfully register on the Auditors Portal, accessible on the PPRA’s website;
b. report on his/her audit on the trust accounts by electronically completing the audit report form on the Portal and attaching a PDF copy of the signed audit report, the format approved by IRBA as available on the IRBA website; and
c. electronically submit the audit report on the trust accounts to the PPRA on the Auditors Portal, within six months of the financial year-end of the business property practitioner.
Consequences of late submission of audit reports on trust accounts
A business property practitioner whose auditor submits the audit report on the trust account(s) after six months of its financial year-end will be liable for a late submission penalty of R20.00 a day, for a maximum period of three months and thereafter a compliance notice of an additional maximum fine of R25 000.00 will be issued by the PPRA Inspections Department if no audit report is received within three months of the submission deadline. The business property practitioner, and not the auditor, will be liable for this late submission penalty.
Winding up audit report on trust accounts
After the occurrence of the following events, a business property practitioner who operates a trust account must wind up the trust accounts in the manner prescribed in Regulation 31 of the PPR:
If the PPRA refuses under the provisions of the PPA to issue a Fidelity Fund Certificate to the business property practitioner;
a. If a Fidelity Fund Certificate issued to the business property practitioner has been withdrawn or lapsed without being renewed;
b. If the business property practitioner ceases to act as such; or
c. If the business property practitioner becomes subject to any disqualification contemplated in section 50 of the PPA.
d. The auditor of the business property practitioner who winds up its trust account after the occurrence of the above events must perform an audit of the trust accounts, covering the period from the start of the last financial year audited to the date the trust accounts were audited and submit such winding up audit report on the Auditors Portal.
Additional requirements applicable to auditors of Payment Processing Agents
Additional requirements applicable to auditors of Payment Processing Agents
The auditor of a payment processing agent must:
a. Audit, within six months of the financial year end of the payment processing agent, the trust accounts environment of the payment processing agent for purposes of completing the audit report template on the trust environment as approved by IRBA and available on its website; and
b. also audit, within six months of the financial year end of the payment processing agent, the trust accounts and individual transactions of the mandating client business property practitioners to enable the auditor to form an audit conclusion on whether the trust accounts were administered in accordance with the requirements of the Act and for purposes of completing the audit report on the trust accounts as approved by IRBA and available on its website.
The scope of the audit of a payment processing agent mentioned above will require the auditor of the payment processing agent to be given unrestricted access to not only documentation of the payment processing agent, but also underlying documentation that might have been concluded by or with the assistance of the mandating client business property practitioners, which underlying documentation support movements of trust moneys and such underlying documentation includes, but is not limited to, contracts of sale and lease and mandates.
The auditor of a payment processing agent, in the same way as an auditor of any other business property practitioner, must submit to the PPRA one single annual audit report on the trust accounts for the payment processing agent on the Auditors Portal accessible on the PPRA website (and receive emailed proof of submission from the PPRA). However, in addition and during the online submission, the auditor of a payment processing agent must also upload and attach:
a. A list of all its mandating client business property practitioners; and
b. An audit report on the trust account environment.