Three companies slapped with 10% of turnover fines as they did not file annual financial statements and another 20 companies are being investigated.

The case was brought against the companies by the Companies and Intellectual Property Commission (CIPC), whose job it is to ensure compliance with the Companies Act.

The CIPC says it brought the case after receiving irregularity reports from the Independent Regulatory Board for Auditors (IRBA). The Auditing Profession Act requires auditors to report irregularities, such as failure to file annual financial statements or failure to register for Vat.

The fines are also a sign that the auditing profession is taking its obligation to report irregularities more seriously.

The Companies Act requires companies to prepare annual financial statements within six months of the end of their financial year, and in some instances file them with regulators. The companies in question and their directors were notified of the irregularities, but the Compliance Notices were ignored. It was at this point that the CIPC took them to court.

Read the full report here.