What is the PI-Score?
The PI-Score or Public Interest Score is a score that every company and close corporation should calculate annually, before compiling annual financial statements. This score determines how annual financial statements should be compiled, and if a standard compilation is sufficient, or if an external review or audit is required.
The PI-Score is based on a standard questionnaire that takes into account the numbers of employees the business has, the turnover, the number of shareholders, external debt and whether the business’s MOI requires an audit.
What is the risk?
Too many business owners are not calculating the company or close corporations PI-Score and are accepting the financial statements as is and as presented by their accountants. The Companies Act of South Africa clearly states when a review or audit is required, and business owners are not aware of these requirements.
As an accounting practice, we prepare the PI-Score before attempting to prepare annual financial statements for our clients as a double check to try and assist our clients to remain compliant with the Companies Act. Should a company not ensure that an audit is preformed when required, director’s can held liable, be deemed to be negligent and fined, or sent to jail.
A summary of the PI-Score can be seen below:
Ensure that you, as the business owner, director or company representative prepares a PI-Score every year. Alternatively, you are welcome to contact The Accounting Company for assistance. We will prepare a free PI-Score for you to give you peace of mind, or alert you to a potential annual financial statement or audit problem.