BackgroundStakeholders in sectional title property place great reliance on the audited annual financial statements of bodies corporate for decision-making purposes. However, because of the specialised nature of such statements, many stakeholders have difficulty in understanding the financial reports of their schemes. Some people have no insight at all into these financial statements. This is unfortunate because the ability to analyse and interpret financial statements is the basis for smart decision making.
New and significant changesThe new Sectional Title Schemes Management Act (STSMA) contains many additions and changes to the mechanics of body corporate bookkeeping and financial management, making the situation even more complex. With risk intensifying, it is becoming increasingly important that sectional title stakeholders fully grasp the concepts used in their audited financial statements and the contents of those statements.
Furthermore, there are no industry-specific auditing and accounting standards to guide accounting and auditing practitioners in performing their work, and industry financial benchmarks are not readily available.
Content of the seminar manualThis manual is designed to -
- equip readers with a basic understanding of how to read audited financial statements. The basics of financial statements will be discussed, focusing on the difference between “traditional” and “sectional title” financial statements; and
- provide a brief overview of the audit process specific to sectional title schemes, as well as of various types of audit reports.
The manual provides -
- a detailed breakdown of new and old sectional title legislation specific to the accounting and auditing function;
- emphasis on real-life examples of proper disclosure, body corporate financial statements and audit reports; and
- examples of practical problems and challenges relating to sectional title accounting and auditing.
The manual will equip readers with a simple and logical approach to the analysis and interpretation of body corporate financial statements. In addition to the basics of trend and ratio analysis, industry-specific benchmarks will be provided.