Auditing season can be stressful for property practitioners, especially given the pandemic-induced lockdown regulations and remote working conditions.
Not only is it a costly undertaking, but it also requires focused attention from team members which may divert resources and hinder normal output. Understanding the roles and requirements of your own company, as well as your appointed auditors, can assist in making sure the process is smoother and far less stressful.
What is my responsibility as a property practitioner?
Your responsibility as a property practitioner is to provide your auditor with everything, they need to complete an audit report in the prescribed format, while ensuring that your auditor submits your audit report to the EAAB online – before the deadline – which four months after your financial yearend.
You also need to ensure that you receive a confirmation email from the EAAB once your audit report has been submitted online so it is important that your auditor captures your contact details correctly.
What is the role of my auditor?
After your auditor has performed the necessary audit procedures and completed the prescribed audit report, he or she needs to submit the audit report to the EAAB online using the MyEAAB Auditors Portal. This must happen within four months of your business’s financial yearend.
What to expect going forward
PayProp South Africa CEO, Jan Davel, says that looking ahead, the Property Practitioners Act (22 of 2019) will son come into operation. The new Act will not only officialise the title change from ‘estate agent’ to ‘property practitioner’ but it will also bring property legislation up to date with current practices and gives timely recognition to the important role of integrated payment platforms, such as PayProp, in today’s rental market.
Section 23 of the Property Practitioners Act states that the Minister may determine circumstances whereby a property practitioner may be exempted from keeping trust accounts. Exempted property practitioners’ accounting records may also undergo a different reviewing process.
Providing more detail, draft regulations 4(2) and 4(3) state that, if a property practitioner is exempted from operating a trust account and has complied with all the requirements of this regulation, then they will also be exempted from having their business and other accounts audited and will only be required to have such accounts independently reviewed by a registered accountant.
Draft Regulation 4.4 of the Property Practitioners Act (22 of 2019) goes further and states that property practitioners who use an accredited “payment processing agent” (such as PayProp) may be exempted from operating their own trust accounts by following the prescribed procedure. It also explains what an accredited “payment processing agent” is and what the qualifying criteria are.
“Such exemption will come as a great relief to many property professionals who dread the cost and administration that comes from the annual audit season,” says Davel. He cautions that for the time being, however, annual audits by accredited auditors are still an EAAB requirement.