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IRBA Final Pronouncement: Definition of Engagement Teams and Group Audits
- 12 June 2023
- Auditing and Assurance
- South African Accounting Academy
The changes to Section 400 relating to the revision to the definition of engagement team and the new provisions in Section 405 relating to group audits (Chapter 1) will be effective for audits and reviews of the financial statements and audits of group financial statements for periods beginning on or after 15 December 2023.
The effective date aligns with that of ISA 600 (Revised).
These revisions holistically address the various independence considerations in an audit of group financial statements. They also deal with the independence and other implications of the changes made to the definition of an engagement team in the IRBA Code, to align with changes to the definition in the International Auditing and Assurance Standards Board's International Standard on Auditing (ISA) 220 (Revised), Quality Management for an Audit of Financial Statements. Specifically, the alignment clarifies the application of the Independence Standards in Part 4A of the IRBA Code, in the context of an audit of group financial statements, in accordance with ISA 600 (Revised), Special Considerations - Audit of Group Financial Statements (Including the Work of Component Auditors) (ISA 600 (Revised)).
The IRBA adopted the revisions made to the International Ethics Standards Board for Accountants' (IESBA) Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), published in February 2023. This followed the local issue of the proposed amendments on exposure for public comment via Government Gazette No. 46088 on 25 March 2022 (Board Notice 229 of 2022).
Access the latest IRBA Code of Professional Conduct for Registered Auditors (Revised April 2023) on https://www.irba.co.za/upload/IRBA%20Code%20(Revised%20April%202023).pdf
Relevance to Auditors, Independent Reviewers & Accountants:
- Adherence with our Code of Conduct is crucial in the performance of our duties.
- Auditors, Independent Reviewers and Accountants should be aware of the latest publications and guidance issued by regulators and standard-setting boards, such as the IRBA and IESBA.
- The 2023 IRBA Code is applicable to all registered auditors. A contravention of, or failure to comply with, any requirements in the 2023 IRBA Code may be regarded as improper conduct within the ambit of Section 21 of the Auditing Profession Act, No. 26 of 2005, as amended (APA) or the IRBA Rules Regarding Improper Conduct. As such, a contravention of, or failure to comply with, any requirements in the 2023 IRBA Code may be investigated and, if appropriate, the registered auditor might be charged in terms of Section 48 of the APA.
- The Revisions to the IRBA Code of Professional Conduct (Revised April 2023) have been made to Strengthen and Clarify the Independence Requirements for Group Audits.
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