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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

Gazette No.39378.

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

(IAASB) international-standard-auditing-isa-810-revised)


Issue 32 October - December 2015