IRBA NEWS - Issue 32

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STANDARDS
In this issue the following topics are discussed:
New and revisedAuditor Reporting Standards
?New and revisedAuditor Reporting Standards.
?ISA 720 (Revised) and auditor focus on “other
information”.
?Revised auditing standards on disclosures.
?IFRS 9: Financial Instruments.
?Proposed Guide for Registered Auditors: Reporting
Responsibilities of the Reporting Accountant Related to
Property Entities in Terms of the JSE Listings
Requirements.
?Proposed SAAPS 3 (Revised 2015) on Illustrative Reports.
?Updates on BEE verification assurance relatedmatters.
?Proposed ISA810 (Revised) on Engagements to Report on
Summary Financial Statements.
?Responding to Non-Compliance or Suspected Non-
Compliance with Laws and Regulations: Proposed
Amendments to the IAASB's International Standards.
?Withdrawal of reports.
?Warnings on pronouncements issued.
?Statistics on reportable irregularities.
The Council for Medical Schemes (the CMS) is the first
regulator in South Africa to require auditors of medical
schemes to report on key audit matters (KAMs) in their audit
reports on medical schemes' financial statements for the year
ending 31 December 2016 and onwards. There are several
benefits to regulators mandating the disclosure of KAMs in
auditor reports. Some of these are to:
?Enhance communication between auditors and investors,
as well as those charged with corporate governance.
?Increase user confidence in audit reports and financial
statements.
?Increase transparency, audit quality and enhanced
information value.
?Increase attention by management and financial statement
preparers to disclosures referencing the auditor's report.
?Renew auditor focus on matters to be reported that could
result in an increase in professional scepticism.
?Enhance financial reporting in the public interest.
Circular 65 of 2015, Auditor's Reports: Key Audit Matters,
which introduces this requirement, is on the CMSwebsite
f2015.pdf).
Practitioners are reminded that the new standards are
effective for audits of financial statements for periods ending
on or after 15 December 2016. Resources on the new and
revisedAuditor Reporting Standards are available on the IRBA
functions-55/252-international-clarity-pronouncements-
adopted-and-i/882-the-new-and-revised-auditor-reporting-
standards) and the IAASB
auditors-report) websites.
Standards Department staff has published an article in the
December 2015 edition of the Accountancy SA magazine. The
article addresses questions such as: What are the main
changes in relation to the scope and auditor's work effort?
What will be communicated in the auditor's report about other
information? What are the newly introduced documentation
requirements? Auditors are alerted to this article for insight to
this important topic as in recent years the detail included in
entities' annual reports as well as other corporate and external
reports, besides the audited financial statements and the
auditor's report, has changed significantly.
ISA 720 (Revised), The Auditor's Responsibilities Relating to
Other Information, is available on the IRBA website
functions-55/252-international-clarity-pronouncements-
adopted-and-i/831-2014-auditing-standards).
An overview of the revised standard, At a Glance: ISA 720
(Revised), The Auditor's Responsibilities Relating to Other
Information, is available on the IAASB website
revised-auditor-s-responsibilities-relating-other-information).
The IRBA Board adopts the IAASB's Addressing
Disclosures in the Audit of Financial Statements –
Revised International Standards on Auditing (ISAs) and
Related ConformingAmendments
The IRBA Board has approved the following revised ISAs for
adoption, issue and prescription by registered auditors in
SouthAfrica:
ISA 720 (Revised) – Auditor focus on “other information”
included in annual reports
RevisedAuditing Standards onDisclosures
Issue 32 October - December 2015