n Journal for Juridical Science - The Financial Reporting Standards Council and its role in terms of the 61 of 1973 and the 71 of 2008

Volume 35, Issue 1
  • ISSN : 0258-252X



Both the 61 of 1973 (hereinafter "the 1973") and the 71 of 2008 (hereinafter "the 2008") provide for the Financial Standards Reporting Council (hereinafter "the Council"). However, its composition, function and legal form is different under each Act. While the Council was established statutorily as a juristic person under the 1973, it will only be established by the Minister of Trade and Industry under the 2008. Furthermore, it seems that whether the Council will be granted the status of a juristic person or not is at the Minister's discretion. In contrast with the 1973, the Council is thus no longer as autonomous. The Council's role in standard setting has been diminished. It is to be a mere advisory forum to the Minister with nothing but non-binding drafting powers. Both the 1973 and the 2008 contain provisions regarding Financial Reporting Standards (hereinafter "FRSs"). In contrast to the vague provision in the 1973, the 2008 clearly sets out the legal status of FRSs. They will be regulations (in the form of Government Notices) and will thus be law (delegated legislation). The Council is an organ of state, however in drafting FRSs it does not perform "administrative action" in terms of section 1 of the 3 of 2000. The wording of the Acts "in accordance with the International Financial Accounting Standards" (section 440S(2) of the 1973) and "consistent with the International Financial Accounting Standards" (section 29(5)(b) of the Companies Act 2008) allows for some discretion to be exercised in the drafting of South African FRSs. The current practice of the Accounting Practices Board to precisely replicate IFRSs is clearly not required by law. It is thus submitted that this practice seems too timid. Contrary to the wording "may" in section 29(4) of the 2008, the Minister has no discretion as to whether or not to issue FRSs at all. Nor will an overly long delay in issuing FRSs be acceptable. This emanates from a purposive interpretation of section 29(4), read with sections 5 and 7 of the 2008.

Beide die No. 61 van 1973 (hierna "die van 1973") en die No. 71 van 2008 (hierna "die van 2008") maak voorsiening vir die Raad op Finansiële Verslagdoeningstandaarde (hierna "die Raad"). Die samestelling, funksie en regsvorm van die Raad verskil egter ingevolge elke Wet. Onder die van 1973 was die Raad statutêr as regspersoon ingestel, terwyl slegs die Minister van Handel en Nywerheid (hierna "die Minister") onder die 2008 die Raad sal instel. Verder blyk dit in die Minister se diskresie te wees om die status van 'n regspersoon aan die Raad toe te ken. In teenstelling met die van 1973 is die Raad dus nie meer so outonoom soos voorheen nie. Die Raad se rol in die stel van standaarde is ook beperk - tot die formulering van nie-bindende voorstelle. Dit sal bloot as 'n raadgewende forum vir die Minister dien. Beide die van 1973 en die van 2008 bevat bepalings aangaande finansiële verslagdoeningstandaarde (hierna "FVSe"). In teenstelling met die onduidelike bepalings van die van 1973, sit die van 2008 die wetlike status van die FVSe duidelik uiteen. Die FVSe sal in regulasies (wat in Staatskoerantkennisgewings afgekondig word) vervat word en as sodanig (afgeleide) wetgewing wees. Die Raad is 'n staatsorgaan, alhoewel dit nie "administratiewe aksie" in terme van artikel 1 van die (No. 3 van 2000) tydens die formulering van FVSe uitvoer nie. Die onderskeie bewoordings "ooreenkomstig die Internasionale Finansiëe Verslagdoeningstandaarde" (artikel 440S(2) van die van 1973), en "moet ... strook met die Internasionale Finansiële Verslagdoeningstandaarde" (artikel 29(5)(b) van die van 2008) laat ruimte vir die uitoefening van diskresie in die formulering van die Suid-Afrikaanse FVSe. Die Suid-Afrikaanse Rekeningkundige Praktykeraad se huidige praktyk om die se IFVSe egter sonder enige wysigings uit te reik word duidelik nie deur die wet vereis nie. Dit word dus voorgelê dat hierdie praktyk blyk te konserwatief te wees. Teenstrydig met die bewoording "kan" in artikel 29(4) van die van 2008, het die Minister geen diskresie daaroor óf die FVSe enigsins uitgereik gaan word óf nie. 'n Oormatige lang vertraging sal ook onaanvaarbaar wees. Beide hierdie afleidings spruit voort uit 'n doelgerigte interpretasie van artikel 29(4), saamgelees met artikels 5 en 7 van die van 2008.

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