Your Content Goes Here The International Standard on Auditing (ISA) 570 (Revised 2024), Going concern, issued by the IAASB, responds to growing expectations from stakeholders for more robust auditor evaluations and reporting on management’s going concern assumptions. Effective for audits of financial statements for periods beginning on or after 15 December 2026, the revised standard strengthens and clarifies the auditor’s responsibilities relating to the going concern assessment, and the implications for the auditor’s report. This article outlines the key changes introduced by the revised standard and explores their implications for auditors, management and those charged [...]

Your Content Goes Here On 27 February 2025, the International Accounting Standards Board (IASB) issued the third edition of the IFRS for SMEs® Accounting Standard. This edition aligns SME accounting more closely with full IFRS — updating or introducing sections on foundational concepts, revenue, financial instruments, fair value, business combinations, and control — while intentionally deferring the amendment of sections on leases, due to complexity concerns. Key changes 1. Section 2: Concepts and Pervasive Principles Fully revised to align with the 2018 Conceptual Framework, this section now provides clearer guidance on developing accounting policies where the [...]

Your Content Goes Here Misstatements in financial statements originate from errors or fraud. The risks of these occurring can only be appropriately determined with a thorough understanding of circumstances, systems and the industry. When applying knowledge and risk assessment in the audit, trends and transactions which do not correlate should raise concerns with the auditor, i.e. lead to professional scepticism.  The importance of applying professional scepticism When performing an audit, the engagement team must plan and perform the audit with professional scepticism, recognising that there may be circumstances and incentives by management causing the financial [...]

Your Content Goes Here Difference between body corporates and homeowners’ associations While both body corporates and homeowners’ associations fall under Community Schemes Ombud Service (CSOS) regulations, homeowners’ associations are not established under the Sectional Title Schemes Management Act (STSMA), but rather under the Companies Act (as non-profit companies) or under their own Constitution and Memorandum of Incorporation (MOI), in accordance with Common Law. Therefore, homeowners’ associations are required to be audited in terms of the Companies Act, and body corporates are required to be audited in terms of the Sectional Title Management Schemes Act. [...]

Proactive Audit Quality: A Continuous Improvement Approach Under ISQM 1 Audit quality is crucial for the financial integrity of financial information relied upon by stakeholders. Yet, many firms take a reactive stance – waiting for firm-wide monitoring reports before addressing deficiencies. This delayed approach leads to recurring issues, last-minute fixes, and a compliance-driven, rather than an improvement-driven culture. ISQM 1 and ISA 220 (Revised) require firms to shift towards a proactive, risk-based, and continuous evaluation of audit quality to ensure that deficiencies are remediated in a timely and effective manner. Instead of relying mainly [...]

Bending the Rules Auditors often find themselves in a delicate situation where an audit client wants a certain outcome, while the rules do not allow it. The correct treatment is usually not popular, and auditors then often try to find a way around it, on the instruction of their client. When confronted with such situations, auditors should ask themselves whether they can still comfortably say that they are acting in the public interest, or whether their objectivity may be called into question in the circumstances. There is a fine line between right and wrong, and this [...]

Changes in SAICA Training Regulations SAICA recently issued their updated SAICA 2025 Training Regulations, effective from 1 January 2025. Training officers must ensure that the current version of the training regulations is communicated to all role-players in the training programme, so that it may be applied, in relation to their responsibilities. An overview of the most significant changes from the previous version of the training regulations is provided below. Definitions The following amendments were made to the definitions: ‘Academic remission’ has been added to the definitions. All references to ‘accredited’ academic qualifications have been changed [...]

Audit Implications of IFRS 18 In the constantly evolving field of financial reporting, auditors must stay abreast of significant changes in accounting standards to ensure accurate and compliant financial statements. One such important standard is IFRS 18, which governs the presentation and disclosure requirements in financial statements. This standard introduces several modifications that have practical audit implications, and auditors must carefully navigate these changes to provide assurance on compliance. Key Changes Under IFRS 18 IFRS 18 becomes effective from 1 January 2027, which may seem far into the future. Auditors and their clients need to [...]

IRBA EAR Rule The IRBA Rule on Enhanced Auditor Reporting for the audit of financial statements of public interest entities (EAR Rule) was published in the Government Gazette on 15 September 2023. This rule will finally become effective from 15 December 2024, and auditors must ensure that they are fully prepared to implement its requirements. The EAR Rule For audits of annual financial statements of public interest entities (PIEs), the audit firm must disclose the following in the independent auditor’s report: a) The final materiality amount determined by the auditor for the financial statements, as [...]

Providing Accounting Services to Audit Clients Many audit firms provide financial statement preparation services to voluntary audit clients through accounting staff and engagement partners that do not form part of the audit engagement team. However, practical problems arise when these audits are required by the Companies Act and, therefore, fall within the ambit of the enhanced independence requirements of this Act. Companies Act requirements To be appointed as an auditor of a company, in terms of Section 90(2)(b) of the Companies Act, a person or firm should not be: (i) A director or prescribed officer [...]