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South African Companies Face Difficulties in Financial Reporting

Public companies in South Africa have been challenged to create integrated rep

Amid the confusion over new International Financial Reporting Standards, public companies in South Africa are being challenged to come up with integrated reports under a different set of guidelines - or explain why they can't.

IFRS standards will be more difficult to implement in South Africa than some current accounting standards and integrated reporting structures set by Mervyn King, according to BusinessDay. The King 3 codes, which have been adopted in a number of countries, mandate integrated reporting for all listed companies. In South Africa, the first country to fully mandate the reporting standards, adoption has been slow.

The 450 public companies that were listed on the JSE in 2010 have so far completed one full set of the integrated reports, BusinessDay reported. They have since been issued a challenge to publish integrated reports. If they are unable, the challenge asks that companies explain why. Riaan Davel of auditing firm KPMG says some companies are implementing the standards well, some not so well and some not at all.

"We are seeing a journey," he told BusinessDay. "It won’t happen in one year. It is a three- to five-year journey."