NEW! IRBA: Revised SAAPS 3 – Illustrative Reports

NEW! IRBA: Revised SAAPS 3 – Illustrative Reports

• 15 March 2024
• Auditing and Assurance
• South African Accounting Academy

SAAPS 3 (Revised March 2024) is aimed at providing 146 pages of practical guidance 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, as well as the legal and regulatory requirements applicable to auditors and auditor reporting in South Africa, as related to the content and format of the auditor's report.

Key Revisions

The main reason for revising SAAPS 3 (Revised March 2024) was to incorporate the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities (PIEs) (EAR Rule) into the illustrative reports. The EAR Rule prescribes additional disclosures in the independent auditor's report on the audit of annual financial statements of PIEs, as defined in the IRBA Code of Professional Conduct for Registered Auditors.

Additional amendments include the following:

• Removal of the extant options in the Basis of Opinion paragraph that accommodated the different effective dates of Parts 1, 3, 4A and 4B of the IRBA Code, as the transitional period has passed - practically reverting to the option for periods going forward (for audits of financial statements for financial periods beginning on or after 15 June 2019).
• Implementation of conforming amendments to ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, related to ISA 600 (Revised), Special Considerations - Audits of Group Financial Statements (Including the Work of Component Auditors) (ISA 600 (Revised)), which affect the sub-bullet where the auditor addresses the Auditor's Responsibilities in the context of a group audit.
• Implementation of the IFRS Foundation Trade Mark Guidelines, in accordance with the International Auditing and Assurance Standards Board's (IAASB) International Accounting Standards Board (IASB) Liaison Working Group Publication.
• Deletion of the Illustrative Auditor-General of South Africa Report (Illustrative Report 4 of Part A) for section 4(3) audits, as it is no longer aligned with AGSA reporting prescriptions.
• Amendments to Notes in Part A, as follows:
  • Addition of a new Note 16, IRBA Rule: Enhanced Auditor Reporting Requirements, which explains the EAR-related additions to the illustrative reports.
  • Amendment to Note 2, Financial Statements, to emphasise and clarify the use of the correct title when referring to the financial statements in the Opinion paragraph.
  • Amendment to Note 6, Relevant Ethics Requirements, to remove superseded information.
  • Amendment to Note 7, Key Audit Matters, to incorporate the EAR Rule requirement to report key audit matters for all PIEs (which is an extension of the ISA 701 requirement through a legal requirement).
  • Amendment to Note 10, Applicable Financial Reporting Framework, to conform to the IFRS Foundation Trade Mark Guidelines.
  • Amendment to Note 13, Auditor's Responsibilities for the Audit of the Financial Statements - Group Audit, to incorporate guidance in respect of the reference to group financial statements that are prepared based on an alternative consolidation process.
  • Deletion of all "Public Sector Perspective" subparagraphs in the Notes to Part A.
• Minor editorial changes.

Effective Date

This SAAPS 3 (Revised March 2024) is effective for auditor's or independent reviewer's 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, the early adoption of SAAPS 3 (Revised March 2024) will equate to 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.

Click here to download the Revised SAAPS 3:

https://www.irba.co.za/upload/SAAPS%203%20(Revised%20March%202024)%20Final%20Pronouncement(1).pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• As an auditor and independent reviewer, you need to consider and comply with International Standards on Auditing, Auditing pronouncements and other Assurance Services, and thus you need knowledge of the format and content that must be contained in your audit report.
• All Registered Auditors, Independent Reviewers and other Independent Assurance Practitioners must comply with the IRBA Pronouncements that affect their reporting on relevant engagements.
• IRBA provides illustrative regulatory reports as guidance to auditors.
• As an Auditor & Independent Assurance Practitioner, you need to comply with the relevant reporting requirements, and must therefore refer to the latest illustrative reports for your relevant client engagements.

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