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IRBA: Proposed ED – SAAPS 3 (Revised)
- 22 September 2023
- Accounting
- South African Accounting Academy
The proposed SAAPS 3 (Revised) provides practical assistance to registered auditors who report on financial statements both for compliance with the International Standards on Auditing (ISAs) or the International Standards on Review Engagements, as applicable; and for the legal and regulatory requirements applicable to auditors and auditor reporting in South Africa, in relation to the content and format of the auditor's report.
The due date for comments is 30 November 2023.
This proposed SAAPS 3 (Revised) contains significant proposed changes, especially for audits of Public Interest Entities. It has been amended to incorporate the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities (EAR Rule) into the illustrative reports. The EAR Rule was published together with Staff Audit Practice Alert 9: IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities, which provides non-authoritative guidance on how auditors may apply the EAR Rule.
The following amendments have also been incorporated into this proposed SAAPS 3 (Revised):
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Removal of the options in the Basis of Opinion paragraph that accommodated the different effective dates of Parts 1, 3, 4A and 4B of the IRBA Code of Professional Conduct for Registered Auditors, as the transitional period has passed;
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Implementation of the conforming and consequential amendments to ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, arising from ISA 600 (Revised), Special Considerations û Audits of Group Financial Statements (Including the Work of Component Auditors) (ISA 600 (Revised)), effective for audits of financial statements for periods beginning on or after 15 December 2023; and
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Deletion of the Illustrative Auditor-General of South Africa (AGSA) Report (previously Illustrative Report 4 of Part A), as it is no longer aligned with the Auditor General's reporting prescriptions.
Depending on the comments received, the expectation is for the CFAS to approve and issue the final SAAPS in March 2024, with that being noted at the subsequent meeting of the IRBA Board.
The proposed effective date for SAAPS 3 (Revised) is for auditor's or independent reviewers' reports issued for audits or independent reviews of financial statements for periods ending on or after 15 December 2024, with early adoption permitted. This aligns with the effective dates of the EAR Rule and ISA 600 (Revised).
Therefore, early adoption of the proposed SAAPS 3 (Revised) will mean an early adoption of both the EAR Rule and ISA 600 (Revised).
If the registered auditor does not intend to early adopt the EAR Rule and/or ISA 600 (Revised), it is recommended that they continue to use the extant SAAPS 3, Illustrative Reports (Revised May 2019), adapted as necessary, until the proposed SAAPS 3 (Revised) becomes effective. You can access the Extant SAAPS3 at https://www.irba.co.za/upload/SAAPS%203.pdf
Click here to download the Exposure Draft:
https://www.irba.co.za/upload/Proposed%20SAAPS%203%20ED%20Sep%202023.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
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Members of IRBA should stay up-to-date with the latest developments and plans that affect registered auditors.
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IRBA Rules issued must be adhered to by all registered auditors, as non-compliance may lead to disciplinary action.
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This new EAR Rule will apply to all your PIE clients.
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Practitioners must be aware of the content of any guidance issued by IRBA in this regard.
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All Registered Auditors, Independent Reviewers and other Independent Assurance Practitioners must comply with the IRBA Pronouncements that affect their reporting on relevant engagements.
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As an Auditor & Independent Assurance Practitioner, you need to comply with the relevant reporting requirements, and must therefore refer to the latest illustrative reports published in the pronouncements for your relevant client engagements.
Relevance to Your Clients:
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None