News in the LEAF Audit Quality Division.

SAICA Training Regulations 2024

2024-01-31T11:05:39+02:00

SAICA Training Regulations 2024 SAICA recently issued their updated Training Regulations, effective from 1 January 2024. Training officers must ensure that the current version of the Training Regulations is communicated to all trainees and other role-players in the training programme, so that it may be applied in relation to their responsibilities. This article provides an overview of the most significant changes from the previous version of the Training Regulations. Training offices The term, ‘re-accreditation visit’, was replaced by ‘monitoring visit’, resulting in several modifications and benefits for training offices. Training offices will now remain accredited, [...]

SAICA Training Regulations 20242024-01-31T11:05:39+02:00

Business Combinations and Related Disclosures

2024-03-11T13:26:05+02:00

Business Combinations and Related Disclosures When performing a group audit, one can become so involved in verifying the detailed consolidation workings that one may omit to specifically consider the impact of business combinations. The relevant financial reporting framework establishes principles and requirements for the recognition, measurement and disclosure of business combinations by the acquirer during the financial reporting period. It is important that the auditor verifies whether business combinations are correctly dealt with in terms of the requirements. Accounting for business combinations IFRS for SMEs Section 19 para 19.6 refers to the application of the purchase [...]

Business Combinations and Related Disclosures2024-03-11T13:26:05+02:00

Consolidation Procedures

2023-07-03T08:28:43+02:00

Consolidation Procedures Audit procedures performed on detailed consolidation processes form an integral part of the performance of group audits. Auditors often neglect to document audit procedures performed on detailed consolidation processes. The group auditor must understand the controls that management has in place over the consolidation process. Thereafter, the group auditor must ensure that sufficient appropriate evidence is obtained and documented based on testing performed on the consolidation process. Controls The group auditor must evaluate overall management controls over the consolidation process and group overall controls, implemented by the group and consolidation adjustments. If management [...]

Consolidation Procedures2023-07-03T08:28:43+02:00

Group Audit Timelines

2023-06-01T13:48:16+02:00

Group Audit Timelines Although auditors often end up doing group audits at some point, surprisingly, many of them don't realise the importance of adhering to timelines during the audit. Generally, group auditors perform the fieldwork and conclusion work first, and only later include planning working papers and group instructions to complete the audit file. They do this at their peril, as group and component auditors may not identify and respond to all risks during fieldwork. Pre-engagement and planning The key considerations of a group audit are: • The quality of evidence to be obtained for the [...]

Group Audit Timelines2023-06-01T13:48:16+02:00

Applying Group Audit Principles

2023-05-02T12:15:54+02:00

Applying Group Audit Principles ISA 600 (Revised) provides clear requirements on how to approach the audit of group financial statements. One may think that these requirements only apply to the audit of a group where consolidated financial statements are compiled, in terms of the relevant financial reporting framework. However, the scope of ISA 600 (Revised) goes beyond that, and there are different circumstances in practice where the principles of ISA 600 (Revised) may be applied. Sub-groups and branches ISA 600 (Revised), paragraphs 2 and 14(k), explains that group financial statements include the financial information of [...]

Applying Group Audit Principles2023-05-02T12:15:54+02:00

Investments in Associates

2023-04-03T16:30:46+02:00

Investments in Associates When considering, during an audit, whether investments have been correctly accounted for, in terms of the relevant accounting framework, it is important to know whether the entity is required to compile consolidated financial statements. This can make a difference when determining whether the accounting policy applied for investments in associates is appropriate based on the accounting framework. IFRS for SMEs International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) Section 14, Investments in associates, indicates that its requirements apply to accounting for associates in consolidated financial statements, and in [...]

Investments in Associates2023-04-03T16:30:46+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

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