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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



Requirements that are clearly distinguished from



Increased clarity of responsibility for compliance with the

IESBACode's requirements;


Increased clarity of language, especially relating to



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


(commonly referred to as the IESBA Long

Association – Re-exposure). This project is aimed at

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Issue 33 January - March 2016