IRBA: Heightened Responsibilities and Risks in Auditing Listed Entities

IRBA: Heightened Responsibilities and Risks in Auditing Listed Entities

• 15 December 2025
• Audit
• South African Accounting Academy

Summary:

The Independent Regulatory Board for Auditors (IRBA) has issued a strong reminder to audit firms of the significant responsibilities and risks associated with auditing listed entities, following recent inspections and regulatory changes in the audit landscape.

Article:

Recent changes to the Johannesburg Stock Exchange (JSE) Listing Requirements concerning the auditor accreditation model have increased competition among audit firms. While there has been a growth in the number of audit firms being appointed across exchanges, Section 3.87 of the JSE Listings Requirements emphasises that any proposed auditor must be subject to a firm-wide independent quality management inspection performed by the IRBA in a current or previous inspections cycle. This has resulted in an increased number of firms being selected for firm-wide inspection.

Key findings from IRBA inspections include:

• Inadequate client acceptance and continuance procedures, leading to engagements without full consideration of capacity, independence, and audit risks.
• Insufficient understanding of the listed environment and failure to identify clients as listed entities, especially those issuing non-equity instruments.
• Lack of expertise, resources, or infrastructure to perform audits to the required standard, including engagement quality reviews and specialist input.
• Independence threats due to fee dependency and the provision of prohibited non-assurance services.
• Over-reliance on financial statement preparers, resulting in undetected errors and inappropriate audit opinions.

Firms that are expanding into the listed space are encouraged to strengthen these areas of potential weakness in advance and ensure that audit teams fully understand the application of the applicable ISAs.

Read the full findings in IRBA News Issue 71 at https://www.irba.co.za/upload/IRBA%20News%20Issue%2071.pdf Refer to our previous Alert dated 3 November 2025

Click here to download the 5-page document:

https://www.irba.co.za/upload/report_files/61.-Inspections_Audit-Risks.pdf 

Relevance to Auditors, Independent Reviewers & Accountants:

• Members of IRBA should stay up-to-date with the latest developments and guides that affect registered auditors.
• Practitioners must be aware of the content of any guidance issued by IRBA.
• As an auditor of a listed entity, you need to be aware of exactly what auditing in the listed environment demands.

0 COMMENTS

LEAVE A COMMENT