News in the LEAF Training Division.

Audit of legal practitioners’ business accounts


Newsletter June Audit of legal practitioners’ business accounts Audit requirements relating to the business financial statements of legal practitioners practicing in companies have been clarified. In October 2019, the Companies and Intellectual Property Commission (CIPC) issued a notice of the withdrawal of the non-binding opinion pertaining to Regulation 28(2)(a) of the Companies Regulations 2011 to the Companies Act 2008. This opinion applied to legal practitioners who are registered as companies, in terms of the Companies Act, and considered whether the holding of assets in the legal practitioners’ trust accounts is regarded as part of the ordinary [...]

Audit of legal practitioners’ business accounts2021-09-19T17:15:37+02:00

Interest on legal practitioners trust accounts


Newsletter May Interest on legal practitioners trust accounts When performing assurance engagements on legal practitioners’ trust accounts, auditors must ensure that they are familiar with all legal and regulatory requirements. When auditors are not fully aware of the latest requirements, misstatements and instances of non-compliance may go undetected. A common area where this may occur is interest earned on trust accounts and paid over to the Legal Practitioners Fidelity Fund (LPFF). This article explains the requirements and what to look out for Types of trust accounts Legal practitioners may operate three different types of trust [...]

Interest on legal practitioners trust accounts2021-09-19T17:16:11+02:00

Significant Risk Assessment


Newsletter April Significant Risk Assessment Risk assessment is a crucial step during any audit, and involves a great deal of judgment by the auditor, especially when it comes to determining which of the risks identified are significant. Many auditors grapple with this, and end up simply including the presumed significant risks of revenue recognition and management override of controls, per ISA 315 and 240, instead of truly applying their mind to the circumstances of each audit client and adequately justifying the risk assessment on file. This article attempts to break this important assessment down into simple [...]

Significant Risk Assessment2021-09-19T17:16:27+02:00

Review of Audit Files


Review of Audit Files In many instances, the review of audit files by audit managers and partners has become more of a chore than an effort to add value and ensure audit quality. Many audit failures might have been prevented, if a thorough review were performed prior to signing the audit report. Performing timely reviews is critical and additional peace of mind may be gained when auditing a higher-risk client, by adding a safeguard in the form of an EQCR or independent file review on higher risk audits. Review basics The key to quality [...]

Review of Audit Files2021-09-19T17:17:03+02:00

Auditing of Compliance with Financial Reporting Frameworks – The Presentation Assertion


Auditing of Compliance with Financial Reporting Frameworks – the Presentation Assertion Audit regulators are reporting that financial statement disclosure deficiencies have increased substantially over the past few years. It is crucial for auditors to realise that they need to have a sound understanding of the financial reporting framework applied by the entity and perform thorough audit procedures to determine whether the financial reporting framework has been correctly applied. This does not merely require the completion of a disclosure checklist, but also the verification of recognition and measurement, in terms of the financial reporting framework and reporting responsibilities placed [...]

Auditing of Compliance with Financial Reporting Frameworks – The Presentation Assertion2021-02-22T13:59:41+02:00

Risk and Sample Sizes


Risk and Sample Sizes The whole focus of an audit hinges on the risk of material misstatement, and the limited resources and time to detect any misstatement. Therefore, the risk of misstatement is assessed, and limited testing performed based on the risk assessed and the measure of accuracy of the results of the tests desired. ISA315 (and its revision) steers clear of explaining the practicalities of applying risk assessment to sample sizes and the audit approach. In this article, we attempt to address this gap. [...]

Risk and Sample Sizes2021-09-19T17:36:19+02:00

The new face of quality management


The new face of quality management There has been significant activity in the quality management arena over the past few years, culminating in the approval of the set of new quality management standards at the September 2020 IAASB meeting. Subject to final approval by the Public Interest Oversight Board later this year, it is anticipated that the standards will be issued by the end of the year and that the profession will have 24 months to implement the changes introduced with these new standards. Key changes The set of [...]

The new face of quality management2022-09-12T14:33:25+02:00

Electronic Signatures


Electronic Signatures In the audit profession, signatures are used for a variety of reasons, including for representations from clients, signing off working papers, and signing the audit- and other reports. With the onset of COVID-19 and the ‘new normal’ of auditors working remotely from users of their documents, electronic signatures have emerged as an important issue to ensure that the form of signature is appropriate for the purpose used. Key requirements The IRBA has issued a request for comments on a proposed explanatory memorandum. The considerations it presents, as well [...]

Electronic Signatures2021-09-19T17:36:32+02:00

Internal Control – We revisit the concepts


Internal Control – We revisit the concepts When thinking about internal control, and its relationship to risk assessment and the ISA 315 standard, we consider it equal to a first-year university auditing subject, and not really an area of concern when it comes to compliance and regulation, since most small-to-medium sized firms insist on following a substantive approach in auditing and do not give internal control as a risk assessment tool the required attention. Important definitions and concepts The definitions of the concepts and [...]

Internal Control – We revisit the concepts2021-09-19T17:36:44+02:00

Transactions that are not at arm’s length


Transactions that are not at arm’s length Due to the prevalence of fraud over the past few years, the IRBA issued a staff audit practice alert in June 2020 to provide auditors with guidance and considerations, with respect to transactions that are not at arm’s length, and the possible audit responses to the resulting audit risks. This article provides a summary of the key aspects addressed in the IRBA staff audit practice alert and encapsulates the message in simpler terms. Please remember to also [...]

Transactions that are not at arm’s length2021-09-19T17:36:53+02:00

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