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Committee for Auditor Ethics (CFAE)


roposed Revised and Restructured IRBA Code of

Professional Conduct

The Committee for Auditor Ethics approved the issuing of the

proposed Revised and Restructured IRBA Code of Professional

Conduct for Registered Auditors (the IRBA Code) in May 2018 for

public comment by 2 July 2018.


The IRBA adopted Parts A and B and the Definitions of the

International Ethics Standards Board’s (IESBA) Code of Ethics for

Professional Accountants (July 2009) published by the International

Federation of Accountants with effect from 1 January 2011.

Subsequently, additional South African requirements were issued.

The IESBA has been working on the restructured IESBA Code and

its related projects for the past three years. The CFAE has followed

this project closely, commented on all proposed amendments

and considered final amendments to the IESBA Code for possible

amendments to the IRBA Code.

Proposed amendments

The CFAE has incorporated recently approved amendments to the

IESBA Code in the IRBA Code and will be recommending these

amendments to the IRBA Board for adoption in November 2018.

Proposed amendments to the IRBA Code are as follows:

IESBA projects

1. Restructure of the IESBA Code of Ethics for

Professional Accountants (IESBA Code)

Some features of the restructuring are:

• Increasing the prominence of the requirements to comply

with the fundamental principles, being independent, where

applicable, and applying the conceptual framework;

• Emphasising that compliance with the fundamental

principles and, where applicable, being independent are the

overarching ethical outcomes for the IESBA Code;

• Distinguishing requirements (paragraphs identified with

an “R”) and numbering in bold from application material

(paragraphs identified with an “A”);

• Increasing clarity of responsibility, particularly in relation to

independence; and

• Increasing clarity of language to improve readability and

understandability, including simpler and shorter sentences;

simplifying complex grammar; and avoiding legalistic and

archaic terms.

2. Safeguards

The approach and details regarding safeguards (as a response

to the threats) have been revised:

• Clarifying safeguards in the extant IESBA Code that were

perceived as unclear and, where warranted, eliminating

those that are inappropriate or ineffective;

• Better correlation between each safeguard and the threat it

is intended to address; and

• Clarifying that not every threat can be addressed by a


• The following new South African paragraphs relating to

safeguards have been incorporated into the Exposure Draft:

• Application material paragraph 120.9 A2 has been moved

to a requirement, i.e. R120.9 A2 SA; and

• A South African application material paragraph (600.4 A3

SA) has been introduced to detail the consideration of

threats to objectivity relating to non-assurance services


3. Professional Scepticism and Professional Judgement

• Describing how compliance with the fundamental principles

in the IESBA Code supports the exercise of professional

scepticism in the context of audit and other assurance

engagements; and

• Emphasising the importance of professional accountants

obtaining a sufficient understanding of the facts and

circumstances known to them when exercising professional

judgement in applying the conceptual framework to comply

with the fundamental principles and, where applicable,

being independent.

South African projects

4. Restructure of South African Paragraphs

• In line with the IESBA drafting conventions, the extant South

African paragraphs have been redrafted and included in

the proposed IRBA Revised and Restructured Code; and

to assist with easy identification, this text is underlined and

in italics. For the purposes of the exposure draft, there

are comments indicating that these refer to South African


• In line with the extant IRBA Code, the IRBA will not be

adopting Part 2 (previous Part C) of the IESBA Code as it is

related to Professional Accountants in Business.

• A

mapping table

is available to facilitate the tracking of

changes from the extant IRBA Code to the proposed

Revised and Restructured IRBA Code. In addition, to assist

with the review of the Proposed Revised and Restructured

IRBA Code, the Exposure Draft includes comments on each

paragraph to explain the derivation, i.e. whether it is from

a particular paragraph in the extant Code or new material.

Proposed effective date

It is proposed that the Revised and Restructured IRBA Code be

in line with the effective date of the IESBA Code. The proposed

effective dates will be as follows:

• Parts 1 and 3 of the Revised and Restructured Code will be

effective as of 15 June 2019.

• Part 4A relating to independence for audit and review

engagements will be effective for audits and reviews of financial

statements for periods beginning on or after 15 June 2019.

• Part 4B relating to independence for assurance engagements

with respect to subject matter covering periods will be effective

for periods beginning on or after 15 June 2019; otherwise, it

will be effective as of 15 June 2019.

Issue 42 | April - June 2018