The new Companies Act (in terms of which non-profit companies are also registered) allows for certain companies to have an annual independent review instead of a full external audit, if they meet the criteria set out in the Act.
However, an independent review provides less evidence with respect to the financial position of the organisation. An audit provides evidence with a high degree of certainty, whereas an independent review provides limited or moderate evidence.
Yes, the independent review is likely to costs less, but potential donors are likely to view applicants who have been audited more favorably than those who have had an independent review. The DGMT is also of the view that an audit assists to provide a stronger application (particular when considering larger grants to well-established organisations.
For more information on independent reviews vs audits, check out the Accountancy SA’s article at the following address:
http://www.accountancysa.org.za/resources/ShowItemArticle.asp?ArticleId=2215&Issue=1103
