IRBA newsletter #33

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ETH I CS c o n t .
developingmore robust and comprehensive provisions
dealing with long association of personnel with an audit or
assurance client. The re-exposure relates to:
?An increase from two to five years in the cooling-off period
for the engagement quality control reviewer (EQCR) on the
audit of a listed entity, and to three years on the audit of a
PIE other than a listed entity;
?An alternative approach to the cooling-off requirements for
PIE audits in the IESBA Code where jurisdictions have
established different but robust legislative or regulatory
safeguards to address the threats to auditor independence
created by long association; and
?A revised approach to determining how long an individual
should cool off after having served either as an engagement
partner (EP) or an EQCR, or in a combination of roles, or
having served only part of the seven-year period as a key
audit partner.
As the IRBA Code adopted Parts A and B of the IESBA Code,
these proposed changes, which could affect registered
auditors, will be considered by the CFAE for possible
amendments to the IRBACode.
In accordance with the provisions of Section 10(1)(a) of the
Auditing Profession Act (Act No.26 of 2005), the IRBAmay, by
notice in the Gazette and pursuant to the provisions of Section
4(1)(c) of this Act, publish for public information and comment
an amendment to the IRBACode. Accordingly, Board Notice 2
of 2016 and Board Notice 11 of 2016 were published in the
Government Gazette for public comment for aminimumperiod
of 30 days.
How toComment
We invite registered auditors and others to submit for
consideration any comments regarding the proposed changes
to the IRBA Code as we prepare our response to the IESBA
amendments. Comments should be submitted by e-mail to
in Word format or directly to the IESBA
through its website, . The closing dates for
comments are, or were, as follows:
The International Ethics Standards Board for
Accountants (IESBA)
IESBA Releases Exposure Drafts on the Structure of the
Code, Revisions to Safeguards and Limited Re-exposure
Draft on Proposed Changes to the Code Addressing the
LongAssociation of Personnel with anAudit Client
The IESBA released, for public comment, three exposure
drafts proposing enhancements to the IESBA Code of Ethics
for Professional Accountants (the IESBA Code) in the last
quarter. The exposure drafts are:
1. Improving the Structure of the Code of Ethics for
Professional Accountants – Phase 1 (commonly referred to
as the IESBAProposed Restructured Code – Phase 1 ED).
The proposed restructured IESBA Code introduces a new
drafting convention. The highlights of the restructuring
include:
?Requirements that are clearly distinguished from
applicationmaterial;
?Increased clarity of responsibility for compliance with the
IESBACode's requirements;
?Increased clarity of language, especially relating to
responsibilities;
?Areorganisation of the content of the IESBACode; and
?Anew guide to the Code.
2. Proposed Revisions Pertaining to Safeguards in the Code –
Phase 1 (commonly referred to as the IESBASafeguards –
Phase 1 ED). Key enhancements proposed in this
exposure draft, which is presented in accordance with the
new structure and drafting conventions, include:
?More robust and prominent requirements related to the
application of the conceptual framework, including a
required overall assessment of the judgements made and
conclusions reached;
?A clearer and more robust description of the concept of
safeguards, as well as clarified and streamlined examples
of safeguards; and
?New guidance regarding the application of the concept of a
“reasonable and informed third party” that is essential in
applying properly the conceptual framework.
3. Limited Re-exposure of Proposed Changes to the Code
Addressing the LongAssociation of Personnel with anAudit
Client (commonly referred to as the IESBA Long
Association – Re-exposure). This project is aimed at
1 0 Issue 33 January - March 2016