Abstract
M.Comm.
The purpose of this dissertation is to determine the role and responsibility of the auditor in assessing the going concern status of South African companies implementing buybacks. The provisions of current legislation in this regard, including the Companies Act and the JSE Listing Requirements will be discussed and the question of whether the current status of the auditor's involvement in the buyback process is sufficient will be explored.
Furthermore, since no specific requirement regarding the going concern assessment with regard to buybacks is placed on the auditor in terms of the Companies Act or the JSE Listing Requirements, the responsibility of the auditor with regard to the going concern concept within the scope of a normal statutory audit will be explored. A workable guideline will be developed to assist the auditor in assessing the impact of a buyback on the company's ability to continue as a going concern and consideration will be given to the process that the auditor should follow in reaching a conclusion on whether a buyback raises a material uncertainty surrounding the company's ability to continue as a going concern.
However, before the issue of the auditor's responsibility with regard to the going concern concept in relation to share buybacks can be addressed, it is necessary to obtain an understanding of the legislation, financial, accounting and taxation implications of buybacks. These factors will be addressed in this study before the auditor's involvement in the buyback process is evaluated.