Preamble and Context Setting
The Board of Directors (the "Board") of [Company Name] (the "Company") hereby convenes to consider and approve the Company's Annual Financial Statements for the fiscal year ended [Insert End Date of Fiscal Year, e.g., 31 December 2024]. This approval process ensures compliance with statutory requirements, relevant accounting standards, and good corporate governance practices.
Financial Statements Approval Checklist for the Board
This checklist guides the Board through the essential steps and considerations prior to the formal approval of the Annual Financial Statements.
1. Preparation and Review Process Confirmation:
- Management Responsibility: Confirm that management has prepared the financial statements in accordance with International Financial Reporting Standards (IFRS) (or IFRS for SMEs, or other applicable framework as relevant to the company, e.g., SA GAAP if applicable for non-public entities), and that they present a true and fair view of the Company's financial position, performance, and cash flows. (Yes/No)
- Internal Review: Have the financial statements undergone thorough internal review by the finance team and senior management, including detailed variance analysis and reconciliation of key accounts? (Yes/No)
- Audit Committee Review (if applicable): If an Audit Committee exists, confirm that the financial statements have been reviewed and recommended for approval by the Audit Committee. (Yes/No/N/A)
- Date of Audit Committee meeting: [Insert Date]
2. Compliance and Disclosure Verification:
- IFRS Compliance: Verify that the financial statements comply in all material respects with International Financial Reporting Standards (IFRS), including all relevant interpretations and disclosure requirements. (Yes/No)
- Companies Act Compliance: Confirm that the financial statements comply with the financial reporting requirements of the Companies Act, No. 71 of 2008 (South Africa), including but not limited to sections relating to content, presentation, and audit. (Yes/No)
- Other Regulatory Compliance: Verify compliance with any other relevant regulatory requirements or industry-specific reporting standards applicable to the Company (e.g., JSE Listing Requirements if applicable). (Yes/No/N/A)
- Going Concern Assessment: Confirm that the directors have performed a robust going concern assessment for at least 12 months from the date of approval of the financial statements and that the basis for this assessment is adequately disclosed. (Yes/No)
3. External Audit Process:
- Auditor's Engagement: Confirm that the external auditors, [Auditor Firm Name], have completed their audit of the financial statements. (Yes/No)
- Unqualified Opinion (Desired): Has the Board been informed that the auditors intend to issue, or have issued, an unqualified audit opinion (or explain any modified opinion)? (Yes/No/N/A)
- Key Audit Matters (KAMs) / Emphasis of Matter: Have the auditors presented any Key Audit Matters (KAMs) or Emphasis of Matter paragraphs, and have these been discussed and understood by the Board? (Yes/No/N/A)
- Management Letter/Report to Directors: Has the Board reviewed the auditor's management letter or report to directors, noting any significant deficiencies in internal control or recommendations, and has management provided a plan to address these? (Yes/No)
- Auditor's Certification: Has the auditor’s signed audit report been received and reviewed by the Board, confirming the completion of the audit? (Yes/No)
4. Board Meeting and Documentation:
- Formal Board Meeting: Ensure a formal Board meeting is convened specifically for the purpose of reviewing and approving the financial statements. (Yes/No)
- Board Discussion: Confirm that the Board has had adequate opportunity to discuss the financial statements, including significant accounting policies, critical judgments and estimates, and any material adjustments proposed by the auditors. (Yes/No)
- Documentation in Minutes: Ensure that the Board resolution for approval, along with key discussions, questions raised, and clarifications provided, are duly documented in the official board meeting minutes. (Yes/No)
- Director's Responsibility Statement: Confirm that the financial statements include a Director's Responsibility Statement as required by the Companies Act. (Yes/No)
Board Resolution for Financial Statement Approval
RESOLVED THAT:
- The Annual Financial Statements of [Company Name] for the fiscal year ended [Insert End Date of Fiscal Year, e.g., 31 December 2024], comprising the Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows, and the Notes to the Financial Statements, as presented to this meeting, be and are hereby approved and adopted.
- The Board confirms that, to the best of its knowledge and belief, the financial statements have been prepared in all material respects in accordance with International Financial Reporting Standards (IFRS) (or applicable accounting framework) and comply with the Companies Act, No. 71 of 2008 (South Africa).
- The Board confirms that the financial statements present a true and fair view of the financial position of the Company as at [Insert End Date of Fiscal Year] and of its financial performance and cash flows for the year then ended.
- The Board is satisfied with the going concern assessment made by management and confirmed by the auditors.
- The Chairperson of the Board, or any other authorised director, is hereby authorised to sign the Annual Financial Statements on behalf of the Board.
Signed by the Chairperson on behalf of the Board:
[Chairperson's Full Name & Signature]
Chairperson of the Board
Date: [Date of Board Meeting where approved]
Supporting Documents (To be attached to the Board Pack)
- Draft Annual Financial Statements for the fiscal year ended [Insert End Date of Fiscal Year].
- External Auditor's Report (signed).
- External Auditor's Management Letter/Report to Directors (if applicable).
- Audit Committee Minutes (if applicable) recommending approval of financial statements.
- Management's detailed presentation on the financial performance and position.
