IRBA NEWS LETTER

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Issue 35 | July-September 2016 10
ETHICS
Committee for Auditor Ethics (CFAE)
CFAE Releases Proposed Amendments to the IRBA Code of
Professional Conduct for Registered Auditors – Responding
to Non-Compliance with Laws and Regulations (NOCLAR)
On 14 July 2016, the International Ethics Standards Board for
Accountants (IESBA) released final amendments to the IESBA
Code of Ethics on Responding to Non-Compliance with Laws and
Regulations (NOCLAR).
These amendments set out a first-of-its-kind framework to guide
professional accountants in what actions to take, in the public
interest, when they become aware of a potential illegal act (NOCLAR),
which could have been committed by a client or employer.
Among other matters, the new standard provides a clear path for
auditors and other professional accountants to disclose potential
noncompliance situations to appropriate public authorities, in
certain situations, without being constrained by the ethical duty
of confidentiality. It also places a renewed responsibility on senior-
level accountants to promote a culture of compliance with laws
and regulations as well as prevent noncompliance within their
organisations.
The IRBA adopted Parts A and B of the IESBA Code of Ethics for
Professional Accountants. This was prescribed in 2010 as the Code
of Professional Conduct for Registered Auditors (the IRBA Code)
in South Africa, with certain additional national requirements. As
the IESBA’s final amendments to NOCLAR result in amendments
to Parts A and B, the CFAE will consider possible revisions to the
IRBA Code.
The CFAE sought comments on the following questions:
• Do registered auditors require clarification on the relationship
between the proposed Code amendments and the statutory
requirement contained in Section 45 Reportable Irregularities
(RIs) of the Auditing Profession Act, 2005 (Act 26 of 2005)?
• Are there other matters of clarification that you would like to
bring to the attention of the CFAE?
It is proposed that the amendments be effective on or after 15 July
2017.
Registered auditors and others were invited to submit any
comments regarding the proposed changes to the IRBA Code by
10 October 2016.
The proposed changes to the IRBA Code, being the final
amendments to the IESBA Code of Ethics, are available in PDF
format and may be downloaded from the
A Board Notice will be published in the Government Gazette to
advise on the publication of the amendments to the IRBA Code,
pursuant to the provisions of Section 10(1)(a) of the Auditing
Profession Act, 2005 (Act No.26 of 2005).
The IFAC has made available resources relating to NOCLAR on its
dedicated
IFAC Publication on Fee Pressure
In January 2016, IFAC released a staff publication, Ethical
Considerations Relating to Audit Fee Setting in the Context of
Downward Fee Pressure, as a response to stakeholder concerns
about downward pressure on fees being a factor potentially
adversely impacting audit quality. This publication highlights
important considerations in the Code of Ethics for Professional
Accountants (the Code) for auditors in relation to the setting of audit
fees. The publication is available on the
Imran Vanker
Director Standards
Telephone: (087) 940-8838
Fax: (086) 575-6535
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