IRBA newsletter #33

8 / 21

ETH I CS
Definition of Public Interest Entities (the IRBACode), following
their issue on exposure on 24 April 2015 for public comment
(Board Notice 88 of 2015).
The CFAE has consulted with the Financial Services Board,
the Johannesburg Stock Exchange, the South African
Reserve Bank, the Council for Medical Schemes and the
Auditor-General South Africa in drafting these amendments,
particularly with regard to the entities that fall within their
jurisdiction and that, in their view, are likely to be considered as
PIEs.
The amendments to the IRBA Code relating to the PIE
definition will allow for more consistent application by
registered auditors. This is also in line with international ethical
practices, and has resulted in the following significant
changes:
?Provision of a list of entities that are likely to be considered
as PIEs, including thresholds for certain regulated
entities;
?Clarity on that it is the firm's responsibility to consider if an
audit or review client is a PIE; and
?Allowance for an opportunity for a firm to consider the client
not to be a PIE and the requirement for the firm to document
the reasons (the rebuttable presumption) for such a
decision.
In drafting these amendments the CFAE considered whether
there is a relationship between the public interest score (PIS)
in the Companies Act 2008 (Act No.71 of 2008) and the PIE
definition in the IRBA Code. The proposed amendment
clarifies the definition of a PIE. In doing so, it will distance the
definition of PIE from the calculation of a PIS in the Companies
Act 2008 (Act No.71 of 2008).
In order to facilitate the implementation of the amendments to
the IRBA Code, including their impact on its inspections,
investigations and disciplinary functions, the amendments will
be effective on or after 1 July 2016.
The final amendments and the related communiqué are
available on the IRBAwebsite.
Committee forAuditor Ethics (CFAE)
IRBA Approves Final Amendments to IRBA Code of
Professional Conduct for Registered Auditors Relating to
the Provision of Non-Assurance Services
The IRBA adopted the final amendments made to the IESBA
Code of Ethics for Professional Accountants (the IESBA
Code), issued during 2015, following their issue on exposure
in South Africa on 20 November 2015 for public comment
(Board Notice 254 of 2015).
The changes in the pronouncement enhance the
independence provisions in the IRBA Code of Professional
Conduct for Registered Auditors (the IRBA Code). These
revisions include the following:
?No longer permitting registered auditors to provide certain
prohibited non-assurance services to public interest entity
(PIE) audit clients in emergency situations, as these were
susceptible to being interpreted too generally.
?New and clarified guidance regarding what constitutes
management responsibility, thus ensuring that they do not
assume management responsibility when providing non-
assurance services to audit clients.
?Clarified guidance regarding the concept of “routine or
mechanical” services relating to the preparation of
accounting records and financial statements for audit
clients that are not PIEs.
?Corresponding changes to the IRBA Code's non-
assurance services provisions with respect to other
assurance clients (Section 291).
The changes will be effective on or after 15 April 2016, with
early adoption permitted.
The final amendments
) and the
related communiqué
) are available on the
IRBAwebsite.
IRBA Approves Amendments to the IRBA Code of
Professional Conduct for Registered Auditors Relating to
the Definition of Public Interest Entities
The IRBA adopted the final amendments to the IRBA Code of
Professional Conduct for Registered Auditors relating to the
9 Issue 33 January - March 2016