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General news in Leaf Quality Systems

Accountable Institutions

2023-03-31T13:56:42+02:00

Accountable Institutions Schedule 1 to the Financial Intelligence Centre Act, 2001 (FIC Act) has been amended, and took effect from 19 December 2022. Some of the amendments to the list of accountable institutions have far-reaching consequences that not all practitioners may be aware of. They may result in many firms and their clients becoming accountable institutions, which implies a greater burden of compliance with the FIC Act. Schedule 1 to the FIC Act The amendments to the list of accountable institutions contained in Schedule 1 to the FIC Act, as published in the Government Gazette No. [...]

Accountable Institutions2023-03-31T13:56:42+02:00

Evaluating the System of Quality Management

2023-01-31T22:14:20+02:00

Evaluating the system of quality management In the past year, firms have been making a significant effort to update their systems of quality management and start implementing the new risk-based standards of managing quality. Throughout this coming year, firms will perform the first round of monitoring to determine whether they are complying with their updated systems. The final step of implementing the new standards must not be overlooked, namely evaluating the system of quality management. Evaluating the system The individual or individuals carrying the ultimate responsibility and accountability for the system of quality management, normally [...]

Evaluating the System of Quality Management2023-01-31T22:14:20+02:00

Monitoring and remediation

2023-01-31T22:11:04+02:00

Monitoring and Remediation Many auditors underestimate the value of regular and robust monitoring of their systems of quality management, followed by focused remediation. If monitoring and remediation is performed correctly, the firm’s system of quality management is bolstered, which results in improved quality of engagements, and improved staff competence and morale. This, in turn, boosts profitability and client confidence. The evaluation of deficiencies needs to be brutally honest, however, so that the root cause of deficiencies may be properly addressed. Firm-level considerations The firm’s monitoring and remediation process must provide relevant, reliable and timely information [...]

Monitoring and remediation2023-01-31T22:11:04+02:00

Engagement performance

2023-01-31T22:11:14+02:00

Engagement Performance One of the root causes of negative regulatory inspection findings is the lack of appropriate involvement by engagement partners on engagements. There are also many instances where audit documentation does not reflect the application of appropriate levels of professional scepticism when auditing and exercising professional judgment. The new quality management standards place increased emphasis on these important aspects to achieve the appropriate level of engagement quality. Firm-level considerations ISQM 1 para 31 requires firms to establish quality objectives that address the performance of quality engagements, including the following: a. Engagement teams understand and fulfil [...]

Engagement performance2023-01-31T22:11:14+02:00

Resources, information and communication

2023-01-31T22:11:24+02:00

Newsletter April Significant Risk Assessment When considering whether appropriate resources are available to perform engagements, practitioners have traditionally only considered human resources available within the firm. The new quality management standards expand on this, however, by requiring firms to also consider the technological and intellectual resources available. Firms should also consider whether appropriate resources are available to maintain their quality management system; they should establish an information system to support the operation of their quality management system, and ensure that the necessary communication takes place internally and externally. Firm-level considerations ISQM 1 para 32 requires [...]

Resources, information and communication2023-01-31T22:11:24+02:00

Ethics, acceptance and continuance

2023-01-31T22:11:43+02:00

Ethics, acceptance and continuance 30 September 2022 Ethics is a fundamental concept that needs to be established in an auditing and accounting practice. It cannot merely be given lip service, and should lead to proactively managing the risk of ethical threats and breaches that could inappropriately influence the firm’s compliance with relevant ethical requirements. One of the occasions when ethics may be involved in audit considerations is when deciding whether to accept, or continue with client relationships and engagements. Quality, integrity and independence should be the overriding factors. Firm-level considerations ISQM 1 para 29 [...]

Ethics, acceptance and continuance2023-01-31T22:11:43+02:00

Knowledge of the business

2022-07-19T12:27:23+02:00

Knowledge of the business There is usually pressure on auditors to perform audits within tight deadlines, which often leads to jumping straight into fieldwork testing without spending adequate time on getting to know the client’s business or changes in the business from the previous year. However, gaining, and documenting a thorough understanding of the entity is a crucial step. It supports the risk and fraud risk assessment being performed, and the determination of the audit approach, while being the biggest source of identifying misstatements. The entity and its environment The auditor needs to perform risk [...]

Knowledge of the business2022-07-19T12:27:23+02:00

Engagement quality reviews

2022-07-01T10:55:13+02:00

Engagement quality reviews Since the inception of ISQC 1, it has been a requirement that audit firms perform engagement quality reviews for appropriate engagements. These reviews are aimed at providing an objective evaluation of the significant judgments made by the engagement team and conclusions reached in formulating the report. However, do you really know when these reviews need to be performed; who can perform them and what they entail? When an engagement quality review is required Per ISQM 1 para. 34 (f), engagement quality reviews must be performed for: (i) audits of financial statements of [...]

Engagement quality reviews2022-07-01T10:55:13+02:00

Improving Audit Quality

2022-05-30T16:01:59+02:00

Improving Audit Quality Annually, audit firms invest vast quantities of blood, sweat and tears in delivering quality auditing and related services to their clients. Yet, audit regulators still report many common audit quality deficiencies in their annual inspections reports, most of which are repeat findings. It is important to root out the causes to make lasting improvements to audit quality, which, in turn, will lead to efficient and profitable firms. Firm-level deficiencies – quality system Firm-wide deficiencies reported on by audit regulators mainly revolve around firm leadership, engagement performance and independence issues. While some improvements have [...]

Improving Audit Quality2022-05-30T16:01:59+02:00

The Impact of POPIA

2021-09-21T22:12:27+02:00

The Impact of  POPIA The Protection of Personal Information Act, 2013 (Act No. 4 of 2013), otherwise known as POPIA, came into effect on 1 July 2020. Responsible parties were granted a grace period of 12 months to ensure compliance with POPIA by 30 June 2021. This means that responsible parties must be able to prove compliance from 1 July 2021. The Information Regulator of South Africa may not yet be fully geared for monitoring compliance on a regular basis, but the regulator will investigate, if any claims are lodged against responsible parties. The consequences for non-compliance are significant. [...]

The Impact of POPIA2021-09-21T22:12:27+02:00

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