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ETH I CS

Definition of Public Interest Entities

(the IRBACode), following

their issue on exposure on 24 April 2015 for public comment

(Board Notice 88 of 2015).

The CFAE has consulted with the Financial Services Board,

the Johannesburg Stock Exchange, the South African

Reserve Bank, the Council for Medical Schemes and the

Auditor-General South Africa in drafting these amendments,

particularly with regard to the entities that fall within their

jurisdiction and that, in their view, are likely to be considered as

PIEs.

The amendments to the IRBA Code relating to the PIE

definition will allow for more consistent application by

registered auditors. This is also in line with international ethical

practices, and has resulted in the following significant

changes:

?

Provision of a list of entities that are likely to be considered

as PIEs, including thresholds for certain regulated

entities;

?

Clarity on that it is the firm's responsibility to consider if an

audit or review client is a PIE; and

?

Allowance for an opportunity for a firm to consider the client

not to be a PIE and the requirement for the firm to document

the reasons (the rebuttable presumption) for such a

decision.

In drafting these amendments the CFAE considered whether

there is a relationship between the public interest score (PIS)

in the Companies Act 2008 (Act No.71 of 2008) and the PIE

definition in the IRBA Code. The proposed amendment

clarifies the definition of a PIE. In doing so, it will distance the

definition of PIE from the calculation of a PIS in the Companies

Act 2008 (Act No.71 of 2008).

In order to facilitate the implementation of the amendments to

the IRBA Code, including their impact on its inspections,

investigations and disciplinary functions, the amendments will

be effective on or after 1 July 2016.

The final amendments and the related communiqué are

available on the IRBAwebsite.

Committee forAuditor Ethics (CFAE)

IRBA Approves Final Amendments to IRBA Code of

Professional Conduct for Registered Auditors Relating to

the Provision of Non-Assurance Services

The IRBA adopted the final amendments made to the IESBA

Code of Ethics for Professional Accountants (the IESBA

Code), issued during 2015, following their issue on exposure

in South Africa on 20 November 2015 for public comment

(Board Notice 254 of 2015).

The changes in the pronouncement enhance the

independence provisions in the

IRBA Code of Professional

Conduct for Registered Auditors

(the IRBA Code). These

revisions include the following:

?

No longer permitting registered auditors to provide certain

prohibited non-assurance services to public interest entity

(PIE) audit clients in emergency situations, as these were

susceptible to being interpreted too generally.

?

New and clarified guidance regarding what constitutes

management responsibility, thus ensuring that they do not

assume management responsibility when providing non-

assurance services to audit clients.

?

Clarified guidance regarding the concept of “routine or

mechanical” services relating to the preparation of

accounting records and financial statements for audit

clients that are not PIEs.

?

Corresponding changes to the IRBA Code's non-

assurance services provisions with respect to other

assurance clients (Section 291).

The changes will be effective on or after 15 April 2016, with

early adoption permitted.

The final amendments

) and the

related communiqué

(

) are available on the

IRBAwebsite.

IRBA Approves Amendments to the IRBA Code of

Professional Conduct for Registered Auditors Relating to

the Definition of Public Interest Entities

The IRBA adopted the final amendments to the

IRBA Code of

Professional Conduct for Registered Auditors relating to the

(http://www.irba.co.za/index.php/ ethics-standards-functions-73/127?task=view http://www.irba.co.za/index.php/ generalnews-43/930-22-february-2016

9

Issue 33 January - March 2016