This article is aimed at addressing a misunderstanding regarding a certificate that auditors are often asked to sign, usually requested by an attorney attending to the transfer of a property (or requested by a bank in relation to a sale or purchase of property where a bond is involved).
Now here comes the part which is often, seemingly, misunderstood: the abovementioned certificate is sent over to “the auditors”, usually on a Friday for some inexplicable reason (this is not a joke, the majority of the ones I have received have been on a Friday), with a simple request: “Please sign the certificate (the one the directors have signed) along with the attached Factual Findings Report and return to us.” And often the request is for us to “quickly sign it” and return via email.
A Factual Findings Report (“FFR”) completed by a Registered Auditor (“RA”) lists a number of specific procedures, as agreed upon with the directors and conveyancer/attorney, which the RA is required to perform and report upon. The procedures to be performed are designed to validate the information contained in the certificate that the directors have signed, for example: “We have inspected the directors’ resolution authorising the transaction and found it to be in accordance with the relevant provisions of the Companies Act.” The FFR is not however an audit opinion, but rather a report on specific findings from having performed certain specific procedures.
The attorney or bank is able to place some reliance on the procedures that the RA has performed with regard to the various items contained in the certificate signed by the directors declaring the transaction to be duly authorised. From the perspective of the RA, this is to be taken very seriously, and the procedures performed with great care.
Performing the procedures and completing the report often require certain documentation to me made available to the RA, such as the signed resolutions authorising the transaction, and certificates from the Companies and Intellectual Property Commission (“CIPC”). A signed FFR cannot therefore be produced within a few minutes from receipt thereof.
Given the sensitivity with timing of matters in the process of a property sale, it would be prudent to ensure sufficient time is allowed for the relevant procedures on the FFR to be completed and the report signed.