Subject Title - INSETA

Sec 19(2) requires that the FSP must have the financial statements auditedin accordance with auditing pronouncements as defined in Section 1 of theAuditing Professions Act, 156 by an external auditor approved by the Registrar.Audited The financial statements must: 157financialstatements(i) fairly represent the state of affairs of the provider‟sbusiness;(ii) refer to any material matter which has affected or islikely to affect the financial affairs of the provider; and(iii) be submitted by the FSP, to the Registrar, within four(4) months after financial year-end, or as allowed bythe Registrar.Sec 19(3) requires FSPs who hold money and/or assets on behalf of theirclients to maintain full and proper accounting records of these, and to submit an audited report together with the financial statements(that is, within four (4) months of financial year-end), in theprescribed format. (We discussed the requirements of the GeneralCode regarding custody of financial products in Chapter 8.1.)Audited financial The report must include the following: 158statements 1. The amount of money and financial products atyear-end held by the provider on behalf of clients;2. That such money and financial products werethroughout the financial year kept separate fromthose of the business of the authorised financialservices provider, and report any instance of noncomplianceidentified in the course of the auditand the extent thereof; and3. any other information required by the Registrar.NOTE 159 : The aim of the Section 19(3) Report is to ensure that clients‟ assetsand or monies held by a provider are protected from unauthorised use andkept separate from the provider‟s business funds and also, to detect any noncompliancewith the Act in respect of those monies and assets.156 Act No 26 of 2005157 Section 19(2)(b) of the Act158 Section 19(3)(a) to (c) of the Act159 Ibid© INSETA - Section 1 12a 239