IRBA NEWSLETTER ISSUE 43 Draft 10

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Committee for Auditor Ethics (CFAE)
Proposed IRBA Code of Professional Conduct for
Registered Auditors (Revised 2018)
The CFAE considered, and then recommended to the IRBA Board
for approval, the amendments made to the International Ethics
Standards Board for Accountants’ (IESBA) Code of Ethics for
Professional Accountants (including International Independence
Standards) (IESBA Code) issued during 2018, following the issue
of those proposed amendments on exposure in South Africa.
The changes to the IESBA Code have given rise to proposed
amendments in the IRBA Code.
Amendments to the proposed IRBA Code (Revised 2018) shall
address the following:
1. Improving the Structure of the IESBA Code.
2. Revisions Pertaining to Safeguards.
3. New Guidance for Professional Scepticism and Professional
Judgement.
4. Offering and Accepting of Inducements.
5. Restructure of South African Paragraphs.
The proposed IRBA Code (Revised 2018) is a positive response
to recent concerns about auditor ethics and the goal of restoring
confidence in the profession. As such, the IRBA Board will be
considering this proposed revised IRBA Code for approval at its
meeting in November 2018.
Proposed effective date
It is proposed that the effective date of the proposed IRBA Code
(Revised 2018) will be aligned with the effective date of the amended
IESBA Code as follows:
1. Parts 1 and 3 of the IRBA Code will be effective as of 15
2. Part 4A of the IRBA Code relating to independence for audit
and review engagements will be effective for audits and
reviews of financial statements for periods beginning on or
3. Part 4B of the IRBA Code relating to independence for
assurance engagements with respect to subject matter
covering periods will be effective for periods beginning on
or otherwise, it will be effective as of 15
[Paragraph R540.19 shall have effect only for audits of
financial statements for periods beginning prior to 15
December 2023. This will facilitate the transition to the
required cooling-off period of five consecutive years for
engagement partners in those jurisdictions where the
legislative body or regulator (or organisation authorised
or recognised by such legislative body or regulator) has
specified a cooling-off period of less than five consecutive
years.]
Part 2 of the IESBA Code relating to Professional Accountants
in Business will be considered for adoption by the South African
Institute of Chartered Accountants. Registered auditors are
reminded of paragraphs 120.9 A2, 300.5 A1 SA and 300.5 A2 of
the IRBA Code that clarify the applicability of Part 2 of the IESBA
Code to registered auditors.
Implementation
The release of the proposed IRBA Code (Revised 2018) will lead
to significant changes and implementation risks that all registered
auditors and audit firms will need to respond to, and these include
the following:
• Training for firm personnel across all levels;
• Updating of the firm methodology across audit and non-audit
service lines;
• Considering amendments to firm policies and procedures;
• Noting differences between local requirements and international
requirements;
• Transitional arrangements and catering for the differing effective
dates;
• Re-assessing safeguards currently used under the extant IRBA
Code, among others; and
• Confirmation that all relevant firm personnel have understood
the implications of the proposed IRBA Code (Revised 2018).
International Ethics Standards Board for Accountants
(IESBA)
IESBA projects in progress
• Safeguards and their applicability pertaining to non-assurance
services.
• Fees.
• Professional scepticism.
• Technology.
• E-Code.
• Alignment of Part 4B of the Code and ISAE 3000 (Revised).
More information on these projects is available on the
ETHICS
Imran Vanker
Director Standards
Telephone: (087) 940-8838
Fax: (086) 575-6535
E-mail:
Issue 43 | July-September 2018 6