Governance and leadership Governance and leadership set the tone at a firm, and create the environment in which all the other components of the firm’s system of quality management operate. For a system of quality management to achieve the intended outcomes, firm leadership needs to ensure that quality management requirements and principles are incorporated into all aspects of practice management, including a culture that facilitates proactive and regular self-scrutiny. Firm level considerations ISQM 1 para 28 requires firms to establish the following quality objectives that address the firm’s governance and leadership, and establish the environment [...]
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Your Content Goes Here Audit firms are struggling to attract talent. Not only in South Africa, but globally, audit firms and Professional Accounting Organisations (PAOs) are losing their appeal for suitable candidates. In their publication, Accountancy education ecosystems are complex. Our ability to attract potential accountants suffers, IFAC highlights the following education-specific challenges in certain regions: • University curricula are not consistently aligned to International Education Standards (IES) and/or PAO expectations, which impacts graduate quality and pass rates in professional exams. • Limited appreciation among students of the wide variety of opportunities for professional accountants and the broader role [...]
Materiality In planning the audit, the auditor makes judgments about misstatements that will be considered material. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Generally, auditors place focus on quantitative materiality considerations and tend to forget qualitative disclosures that could also be indicative of a misstatement being material by nature. It is important to consider and document all relevant aspects when determining the materiality levels and material qualitative disclosures relevant to [...]
Your Content Goes Here The ASB noted that some entities applied the incorrect versions of the standards of GRAP in the preparation of their financial statements for 31 March 2022. The standards that are effective and should be applied are GRAP 104 (issued October 2009) and GRAP 25 (issued November 2009). In 2019 and 2021, the ASB revised GRAP 104 and GRAP 25, respectively. The status of these standards is as follows: GRAP 104 on Financial Instruments (Revised 2019) is not yet effective. The differences between the 2009 and 2019 versions of GRAP 104 are significant. GRAP 25 [...]
Your Content Goes Here The IRBA Board adopted the IAASB’s suite of quality management standards in March 2021, comprising the following: ISQM 1 – Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements ISQM 2 – Engagement Quality Reviews ISA 220 (Revised) – Quality Management for an Audit of Financial Statements. Consequently, the IESBA made Quality Management-related Conforming Amendments to the IESBA Code. The IRBA has subsequently adopted these amendments. The Government Gazette will advise on the publication of the amendments to the IRBA Code. The quality management-related [...]
Your Content Goes Here The ICAEW Audit and Assurance Faculty guide focuses on ISQM 1 requirements, in relation to resources obtained from service providers. It highlights the range of information that firms applying ISQM 1 may require to identify and assess quality risks, and determine whether specific resources are appropriate for use in their system of quality management (SOQM) and performance of engagements. ISQM 1 addresses the fact that firms are solely responsible for the design, implementation and operation of their own SOQM – even when they obtain resources from service providers. Firms must make a thorough evaluation [...]
Your Content Goes Here Registered auditors are advised to take note of FSCA Communication 14 of 2022 (RF): Further clarification of the use of certain prescribed formats for preparing financial statements under Section 15 of the Pension Funds Act, 1956. This communication is available on the Authority's website, by clicking on the following link: Industry Communication. For more information, please contact the Authority directly by emailing Ms Wilma Mokupo at Wilma.Mokupo@fsca.co.za Industry Communication
Your Content Goes Here The IRBA Board approved the release of the Proposed IRBA Rules arising from the International Standards on Quality Management for public comment. The proposed rules are published alongside an explanatory memorandum. These rules were informed by consultation with internal and external stakeholders and the input of IRBA's Committee for Auditing Standards (CFAS). The proposed IRBA Rules deal with the following: Firm Chief Executive Officer (CEO); Transparency reports; Engagement quality reviews; Engagement quality reviewer (EQR) and an assistant to an EQR; and Assembly and retention of audit documentation. The IRBA welcomes comments from auditors and [...]
The International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB) have communicated plans for the future role, governance and development of the VRF’s Integrated Reporting Framework and Integrated Thinking Principles. The IFRS Foundation will undertake an engagement programme for market participants to explain the transition of the Integrated Reporting Framework to a resource used by both boards, as well as advocating for the use and development of Integrated Thinking Principles. The Integrated Reporting Framework drives high-quality corporate reporting and connectivity between financial statements and sustainability-related financial disclosures, which improves the quality of information provided to investors. [...]
Your Content Goes Here IFAC’s Professional Accountants in Business (PAIB) Advisory Group compiled a new report, Global Priorities for Professional Accountants in Business and the Public Sector, which explores key global trends impacting professional accountants as CFOs and business leaders. The report features the role of accountants and the profession in: Inflation and the supply chain crunch The Circular Economy Enabling an integrated mindset in business Audit committees and addressing new responsibilities Enabling an effective public sector finance workforce. Access the report and additional insights by visiting the following link: read more