IRBA NEWSLETTER ISSUE 44

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Committee for Auditor Ethics (CFAE)
IRBA Code of Professional Conduct for Registered
Auditors (Revised November 2018)
The IRBA draws the attention of all registered auditors to the release
of the IRBA Code of Professional Conduct for Registered Auditors
(Revised November 2018) (IRBA Code (Revised November 2018)).
The IRBA Code (Revised November 2018) applies to all registered
auditors (firms and individuals), regardless of whether their status
is recorded in the IRBA’s register as assurance or non-assurance.
The IRBA adopted 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
proposed amendments on exposure in South Africa.
Board Notice No. 171 of 2018 was included in Government Gazette
No. 42037 dated 16 November 2018, advising on the publication
of the amendments to the IRBA Code (Revised November 2018)
pursuant to the provisions of Section 10(1)(a) of the Auditing
Profession Act, 2005 (Act No. 26 of 2005).
Amendments to the IRBA Code (Revised November 2018) include
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 IRBA Code (Revised November 2018) is a positive response
to recent concerns about auditor ethics and the goal of restoring
confidence in the profession.
The contains a list of links to relevant guidance on
the IRBA Code (Revised November 2018), and this is guidance that
has been developed internationally and locally. A is
available to facilitate the tracking of changes from the extant IRBA
Code to the IRBA Code (Revised November 2018).
Effective date
The effective date of the IRBA Code (Revised November 2018) will
be aligned with the effective dates of the amended IESBA Code.
The effective dates are 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 has been adopted by SAICA. 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 IRBA Code (Revised November 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 IRBA Code (Revised November 2018).
The IRBA Code (Revised November 2018) may be downloaded
from the
Exposure Draft: Proposed amendments to Section
321 of the IRBA Code of Professional Conduct for
Registered Auditors (Revised November 2018): Second
Opinions
The CFAE approved the issuing of the amendments to Section 321
of the IRBA Code (Revised November 2018): Second Opinions on
exposure in November 2018 for a period of 60 days.
Circular 01/2006, Giving Second Opinions (the Circular), was issued
in November 2006 by the CFAS. The Circular was issued to ensure
appropriate communication between the auditor when asked to
issue a second opinion, the existing auditor and their client to avoid
misunderstandings and/or potential conflicts. The Circular includes
practical guidance when there is a request for a second opinion on
an accounting treatment.
When the IRBA adopted Parts A and B of the IESBA Code, it was
not considered necessary for the Circular to be revised as the
requirements, in principle, were incorporated into Section 230:
Second Opinions of the IRBA Code (January 2011). The Circular
was retained as it was still in use and offered good guidance.
ETHICS
Issue 44 | October-December 2018 9