STANDARDS c o n t .
(i) There are significant limitations, whether implicit or
explicit, on the identity of suppliers, service providers,
clients or customers;
(ii) The maintenance of business operations is
reasonably considered to be improbable, having
regard to the resources available;
(iii) The terms and conditions were not negotiated at arm's
length and on a fair and reasonable basis.
Section 13O of the B-BBEEAmendmentAct states that:
(1) Aperson commits an offence if that person knowingly:
(a) Misrepresents or attempts to misrepresent the broad-
based black economic empowerment status of an
(b) Provides false information or misrepresents
information to a B-BBEE verification professional in
order to secure a particular broad-based black
economic empowerment status or any benefit
associated with compliance with thisAct;
(c) Provides false information or misrepresents
information relevant to assessing the broad-based
black economic empowerment status of an enterprise
to any organ of state or public entity; or
(d) Engages in a fronting practice.
(2) A B-BBEE verification professional or any procurement
officer or other official of an organ of state or public entity
who becomes aware of the commission of, or any attempt
to commit, any offence referred to in subsection (1) and
fails to report it to an appropriate law enforcement agency
is guilty of an offence.
Section 13O(2) therefore requires an auditor to report an
offence that the auditor becomes aware of, in terms of Section
13O(1), failing which the auditor is guilty of an offence.
No formal auditor report format has been prescribed by the
Commission for the reporting by auditors of fronting practices.
A report completed by the auditor detailing the auditor's
findings in a format that has been designed by the auditor is
currently acceptable for reporting to the Commission.
The amended B-BBEE Verification Manual issued for
The DTI issued the amended
Verification of and Reporting on
Broad-Based Black Economic Empowerment in Terms of the
Codes of Good Practice
manual for a 30-day public
commentary period effective from 1 November 2015 to 30
November 2015, on 6 November 2015, per Government
Sector charters and codes
At the time of writing, there were many developments in
respect of sector specific charters. B-BBEE approved
registered auditors (BARs) are urged to be circumspect and
diligent in accepting and undertaking assignments, especially
in identifying what rules would apply to the specific industry. In
the event of doubt, queries should be referred to the BEE Unit
of the DTI.
Proposed ISA 810 (Revised),
Engagements to Report on
Summary Financial Statements
The IAASB published the proposed ISA 810 (Revised),
Engagements to Report on Summary Financial Statements
on 3 August 2015 for exposure for public comment by 2
November 2015. Proposed ISA 810 (Revised) deals with the
auditor's responsibilities relating to an engagement to report
on summary financial statements derived from financial
statements audited in accordance with ISAs by that same
auditor. The IAASB is proposing limited conforming
amendments to ISA 810 as a result of the issuance of its new
and revised Auditor Reporting Standards, which address
auditor reporting on general purpose financial statements.
A CFAS task group submitted a comment letter to the IAASB,
and the exposure draft as well as the comment letters
submitted are available on the IAASB website( .
The International Audit and Assurance Standards Board
Issue 32 October - December 2015