Avoid being stung by new B-BBEE codes

Cape Town - With the new broad-based black economic empowerment (B-BBEE) codes having been introduced, professional accountants need to be certain of their facts before issuing BEE certificates, according to Faith Ngwenya, technical and standards executive at the South African Institute of Professional Accountants (Saipa).

"They need to confirm that the turnover of the entity is less than the R10m threshold to be rated as an exempted micro enterprise (EME), this is particularly necessary where the certificate is being issued for an entity that is not your regular client" she said.

"In terms of the new codes, the turnover threshold to qualify for EME status has increased from R5m to R10m. This means there will be many more enterprises seeking EME certification than would have required a verification in the previous BEE codes of good conduct."

Professional accountants or accounting officers may issue these certificates, but they must be sure that the enterprises qualify before doing so, to avoid falling foul of the codes and being seen as undermining the spirit of the B-BBEE Act.

The days of online issuing of certificates are over.

Any false declaration will be viewed in the eyes of the law as fronting and as collusion between the company owner and the professional accountant, whether it was negligence in failing to verify the figures or not, she explained.

The professional accountant would be liable for criminal charges, the details of which will be announced later this year by Minister of Trade and Industry Rob Davies.

Ngwenya also advised professional accountants, who wish to become accredited verification agents to be eligible to perform verification of entities with annual turnover above the EME threshold of R10m and above, to ensure that they meet the requirements of the Act.\