THE SECTIONAL TITLE INDUSTRY IN SOUTH AFRICA: PERSPECTIVES OF ACCOUNTING AND AUDITING PRACTITIONERS

Abstract

Sectional title property plays an important role in addressing the high priority housing problem in South Africa. Very little research has so far been done on the South African sectional title industry from an accounting and auditing perspective. Furthermore, sectional title legislation is often contradictory and confusing. Sectional title owners are also putting pressure on costs, bringing about unique industry challenges. These aspects do, however, provide ample opportunity for research. The aim of this article was to provide an overview of practical problems experienced by accounting and auditing practitioners regarding risks, auditing- and accounting-specific problems relating to sectional title. The literature review covered the main legal aspects relating to accounting and auditing matters of sectional title schemes, paving the way for an empirical study performed on the sectional title industry in South Africa by way of interviewing a sample of key role players in the industry. The empirical results revealed significant contradictory and confusing aspects and uncertainties in the industry. Various problems and concerns were addressed and practical recommendations were made that can be of assistance to owners, trustees, managing agents, accountants and auditing professionals. The findings can also be used as a valuable basis for further research.