South Africa’s Council for Medical Schemes (CMS) has issued new requirements that will affect auditor appointments for certain medical schemes from financial years ending on or after 31 December 2028. The changes focus on auditor independence, firm rotation and broader participation in the medical schemes audit market.

Although the requirements apply specifically to medical schemes, they provide an important planning reminder for finance teams, audit committees and boards: auditor tenure, independence and appointment processes should be monitored throughout the year, not only when annual financial statements are being finalised.

What the CMS has changed

CMS Circular 27 of 2026 sets out conditions for appointing auditors under section 36(2) of the Medical Schemes Act. The conditions will be incorporated into the CMS Audit Quality Indicators and will apply to auditor appointments for assurance engagements relating to financial years ending on or after 31 December 2028. Read the CMS summary of Circular 27.

For public-interest-entity (PIE) medical schemes, an audit firm, including a network firm, may not serve as appointed auditor for more than 10 consecutive financial years. A five-year cooling-off period will apply before the firm may be reappointed. The tenure period is measured from the firm’s earliest appointment date, and a merger, acquisition or demerger does not restart the clock.

For non-PIE medical schemes, the existing individual rotation approach continues. An engagement partner, engagement quality reviewer, or person serving in both roles may not serve for more than seven cumulative years, followed by a five-year cooling-off period.

Joint audits are being encouraged

CMS Circular 28 encourages medical schemes and audit committees to consider joint or shared audit engagements. The stated objectives include improving auditor inclusion, supporting skills transfer, developing emerging firms and increasing competition while maintaining audit quality and independence. Read the CMS summary of Circular 28.

CMS identifies the complexity of medical scheme reporting, including the application of IFRS 17, as one factor contributing to limited participation by audit firms in the sector. Joint or shared arrangements may help combine specialist knowledge with capacity development, but they will still require clear allocation of responsibilities, effective communication and appropriate oversight by the audit committee.

Who is affected?

  • PIE medical schemes approaching the 10-year audit-firm limit;
  • Non-PIE medical schemes tracking engagement-partner and quality-reviewer tenure;
  • Boards and audit committees responsible for auditor appointments;
  • Audit firms assessing future eligibility and cooling-off periods; and
  • Finance teams supporting audit tenders, independence confirmations and transition planning.

What finance teams should check now

First, document the current auditor’s appointment history, including appointments that predate changes in ownership, firm structure or network affiliation. Next, confirm whether the medical scheme is classified as a PIE for the relevant requirements. The classification should be verified against the applicable regulatory framework rather than assumed.

Teams should also review existing engagement-partner and engagement-quality-reviewer tenure, record any previous rotations, and identify the likely transition date. Where a rotation may be required, the audit committee should allow sufficient time for a competitive process, independence assessments, handover procedures and access to specialist IFRS 17 knowledge.

CMS has also provided transitional measures, including arrangements for firms that have already served for 10 years or more and joint audits where both firms have reached the 10-year point. These details should be reviewed with the audit committee and professional advisers before an appointment decision is made.

Practical next step

Prepare a one-page auditor-tenure register covering the firm, network relationships, engagement partner, quality reviewer, appointment dates, prior rotations and expected cooling-off periods. A documented register can help the board identify risks early and support a more orderly transition.

For broader accounting, reporting and compliance support, businesses can explore Your Financial Partner’s services.