- When a sectional title body corporate has more than one member, it has a legal obligation to have its financial accounts audited.
- Most other forms of community schemes are required to have their annual financial statements audited each year.
In terms of section 39 (1) (d) of the CSOS Act, an application may be for:
“an order requiring the association to have its accounts, or accounts for a specified period, audited by an auditor specified in the order”
Examples of issues
It may happen, particularly when an association’s annual general meetings are delayed, that the schemes’ books of account are not audited for long periods. An owner may consider want an audit to confirm that the body corporate’s accounts are in order and its reserve funds are secure.
It is not unusual for owners to suspect that the scheme’s finances have not been properly handled or that its income has not been properly applied. It is also not unusual for scheme executives to fail or refuse to arrange for an audit, despite the fact that it has been demanded or that the scheme’s governance documentation or an applicable law requires it.
Sometimes owners are not happy that the association’s current auditors are properly independent, and they may require an audit of the scheme’s books by another auditor who they consider is independent.
In these cases, and any other where an audit is reasonably required, application can be made to the CSOS for an order giving the appropriate relief.
Example of order
An example of the type of order the CSOS could give is:
The trustees of the Valley Gaze Retirement Scheme must have its financial accounts from March 2015 to date audited by Rath and Motale Auditors of Sandton, the audit report to be completed and delivered to all owners in the scheme within three months of the date of this order. This order takes effect immediately.
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