Revisions to the IRBA Code of Professional relating to non-assurance services and fee-related provisions

08 December 2021
Auditing and Assurance
South African Accounting Academy

These revisions significantly strengthen the guardrails around auditor independence in two important areas that have the potential to create incentives that could influence auditor behaviour - NAS provided to audit clients and Fees.

NAS Provisions

The revised NAS provisions replace Section 600 of the IRBA Code and include conforming and consequential revisions to Sections 400, 525, 900 and 950. The most substantive changes to the NAS provisions include:

The introduction of a prohibition on audit firms to provide NAS to public interest entity audit clients, if that might create a self-review threat.
New provisions to enable and promote more robust engagement about independence matters relating to NAS between auditors and those charged with governance (TCWG) of public interest entity audit clients.
Comprehensive guidance to steer auditors threat assessments and actions in relation to NAS.

Effective date

Revised Section 600 and the conforming amendments to Part 4A will be effective for audits and reviews of financial statements for periods beginning on or after 15 December 2022.
The conforming and consequential amendments to Sections 900 and 950, in relation to assurance engagements with respect to underlying subject matters covering periods of time, will be effective for periods beginning on or after 15 December 2022; otherwise, these amendments will be effective as of 15 December 2022.

Fee-Related Provisions

The revised fee-related provisions replace Section 410 of the IRBA Code and include consequential and conforming amendments to Sections 120, 270, 320, 330, 400 and 905. The most substantive changes to the fee-related provisions include:

New provisions to enable and promote more robust engagement between auditors and TCWG of public interest entities about independence matters relating to fees.
Strengthened provisions to address undue fee dependency on audit clients.
Provisions to stimulate greater public transparency about fees paid by audit clients that are public interest entities, to assist stakeholder judgments about auditor independence.
Comprehensive guidance to steer auditors threat assessments and actions in relation to fees.

Effective date

For the revised Section 410 and consequential amendments to Part 4A - effective for audits of financial statements for periods beginning on or after 15 December 2022.
For the revised Section 905 - in relation to assurance engagements with respect to underlying subject matters covering periods of time, effective for periods beginning on or after 15 December 2022; otherwise, effective as of 15 December 2022.
For conforming and consequential amendments to other sections of the Code - effective as of 15 December 2022.

Click here to download the Amendments to the IRBA Code:

https://www.irba.co.za/guidance-for-ras/ethics:-the-rules-and-the-code/the-irba-code-revised-2018

How does this affect you?

Relevance to Auditors, Independent Reviewers & Accountants:

All registered auditors are ethically bound to the Code of Conduct, which IRBA adopts whenever it is revised by IESBA.
Non-adherence to the Revised Code of Conduct may lead to disciplinary action being undertaken by IRBA as the regulator.

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