What’s News? Your Content Goes Here With increasing regulatory demands, many small and medium-sized audit practices (SMPs) have shifted their focus almost entirely to compliance — often at the expense of essential business practices. While ISQM 1 and ISQM 2 introduce some business-aligned principles, they are frequently applied in a narrow, compliance-driven manner, rather than being integrated into the firm's broader operations. To truly benefit, firms should approach these requirements by asking, ‘What is the purpose?’, ‘What processes already address this?’ and ‘How can we adapt them to support both business efficiency and audit quality?’ Beyond the standards, [...]

What’s News? Your Content Goes Here I have been in the audit profession for 43 years now. I was blessed to be with a ‘big eight’ firm when I started, at a time when there were no formal auditing standards to speak of, but I was trained in risk-based auditing. I became involved in a small audit division where one would be involved in the accounting and tax of a client, as well, and sometimes, producing monthly management reports, with discussions of business performance and issues with clients. The intricate knowledge of the business and the affairs of [...]

What’s News? Your Content Goes Here The largest risk for an auditor is an audit failure, i.e. where the audit report issued was inappropriate. This can only occur when there is a lack of evidence to support the audit opinion issued. In most cases, a material balance or disclosure, or the completeness of balances and disclosures are not appropriately addressed. Management of the auditee, who spend a whole year working on the business generating the financial results, rely on the auditors to be knowledgeable enough to point out deficiencies to them. In order to address the full spectrum [...]

What’s News? Your Content Goes Here With the advent of quality management standards, such as the International Standard on Quality Management 1 (ISQM 1), and the stricter regulation of file lockdown procedures and archiving, many firms have had to adapt their procedures to control the lockdown of engagement files, and the retention of system and engagement files. However, one critical aspect that is often overlooked is the integrity of the files. It is an area which is easily overlooked, as the content of files can’t be easily checked or monitored. Regulatory considerations and the importance of file integrity [...]

What’s News? Your Content Goes Here On 27 December 2024, certain sections of the Companies Amendment Act 16 of 2024 became effective, including: Section 16, dealing with the effective date of MOI changes Section 45, which now sets out that the provisions of this section do not apply to the giving by a company of financial assistance to, or for the benefit of its subsidiaries Section 61, which requires the presentation of a social and ethics committee report, and the appointment of the social and ethics committee members at the AGM Section 72, with all the updated requirements [...]

What’s News? Your Content Goes Here After a year of insightful monitoring- and EQR reviews, LEAF has identified recurring findings during audit engagement file monitoring reviews across various industries. They are all similar to the IRBA themes of findings experienced during engagement inspections. Improving quality requires a mind shift from pure completion of methodology and templates, without regard for the circumstances of the audit, and the intentions of standards, to a clear knowledge of the circumstances of the audited entity and its business, and how the auditing and accounting standards are applied, without being led by generalised programmes. [...]

What’s News? Your Content Goes Here Artificial Intelligence (AI) is very topical, and hundreds of variations of AI are already on offer to solve a variety of problems. There are innumerable arguments for and against AI in the audit profession. Many small and medium practices (SMP), ours included, watched its emergence intently, like a tennis match, without knowing whether it was relevant; how the regulators viewed the future with AI; how it could be used by staff to manipulate audit procedures; and how it could be used to the benefit of an audit. These questions can only be [...]