IRBA Newsletter Issue 48

Issue 48 | October - December 2019 5 STANDARDS cont. comments regarding this proposed Guide to the IRBA by 6 March 2020 . Comments, in Word format, should be submitted via e-mail to standards@irba.co.za . All comments will be considered a matter of public record. A copy of the exposure draft is available in PDF format and may be downloaded from the exposure drafts page on the IRBA website. Proposed Guide for Registered Auditors: Engagements on Legal Practitioners’ Trust Accounts (Revised November 2019) The CFAS approved the release of the Proposed Guide for Registered Auditors: Engagements on Legal Practitioners’ Trust Accounts (Revised November 2019) (this proposed Revised Guide) in November 2019 for exposure for public comment by 5 February 2020 . This proposed Revised Guide provides guidance to registered auditors (auditors) in the special circumstances applicable to engagements on legal practitioners’ trust accounts, as required by the Legal Practice Act, Act No. 28 of 2014 (the Act), and the South African Legal Practice Council Rules made under the authority of Sections 95(1), 95(3) and 109(2) of the Act (the Rules), including an auditor’s responsibility to report a reportable irregularity. It is also relevant for legal practitioners in understanding the nature of the engagement, and the respective responsibilities of the parties. This proposed Revised Guide has been updated for the following: • The “new” Act, which was enacted on 22 September 2014 (Government Gazette No. 38022). With the exception of certain chapters, the Act was implemented on 1 November 2018 (Government Gazette No. 42003), thereby replacing the Attorneys Act 53, 1979, in its entirety (with some exclusions); • The Rules, as published in Government Gazette No. 41781 on 20 July 2018 and effective from 1 November 2018; • The IRBA Code of Professional Conduct for Registered Auditors (Revised November 2018) (IRBA Code); and • Other relevant editorial changes. Proposed Effective Date Depending on the comments received, it is anticipated that the final Guide will be approved by the CFAS in March 2020. Following that, it will then be issued in that same month, with such approval and issue being noted at the subsequent meeting of the IRBA Board. It is expected that the final Revised Guide will be effective for engagements in respect of financial periods commencing on or after 1 March 2019, which is consistent with the approach of the extant Guide. Request for Comments The CFAS welcomes comments on all matters addressed in this proposed Revised Guide and seeks responses to two specific questions that are set out in the Explanatory Memorandum section. We invite auditors and other interested parties to submit any comments regarding this proposed Revised Guide. Comments, in Word format, should be submitted via e-mail to standards@irba. co.za . All comments will be considered a matter of public record. A copy of the exposure draft is available in PDF format and may be downloaded from the exposure drafts page on the IRBA website . IRBA Staff Audit Practice Alert 3: The Audit Implications of International Financial Reporting Standard 15, Revenue from Contracts with Customers The IRBA Chief Executive Officer has approved for issue the IRBA Staff Audit Practice Alert 3: The Audit Implications of International Financial Reporting Standard 15, Revenue from Contracts with Customers, for use by registered auditors (auditors). This alert, hereafter referred to as the IRBA Staff Audit Practice Alert, is the IRBA’s response to the interest and concerns raised about the audit implications of International Financial Reporting Standard (IFRS) 15, Revenue from Contracts with Customers. It was prepared by the IFRS15 Task Group of the CFAS. IFRS 15 became effective for annual reporting periods beginning on or after 1 January 2018, an effective date that also applies to entities that apply IFRSs in South Africa. IFRS 15 establishes the principles that an entity applies when reporting information about the nature, amount, timing and uncertainty of revenue and cash flows from a contract with a customer. Therefore, in applying IFRS 15, an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This change in the framework for recognising revenue from the traditional “risks and rewards” approach in International Accounting Standard 18, Revenue, impacts how auditors audit revenue from contracts with customers. As a consequence, this IRBA Staff Audit Practice Alert serves to provide auditors with: • The background to the risks related to, and audit implications of, IFRS 15; and • Questions to be considered that can be used by the audit firm, the audit engagement team and the engagement quality control reviewer when considering certain audit implications of IFRS 15. This IRBA Staff Audit Practice Alert does not constitute an authoritative pronouncement from the IRBA, nor does it amend or override the ISAs, South African Standards on Auditing, South African Auditing Practice Statements, South African Guides (collectively called pronouncements), or the IFRSs. Also, this IRBA Staff Audit Practice Alert is not meant to be exhaustive. Reading it is