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 [...]

What’s News? Your Content Goes Here The application of artificial intelligence (AI) in the accounting and auditing profession is becoming widespread, and its uses manifold. Based on recent research, some audit firms allow their staff to use generative AI (GenAI) tools when preparing certain administrative documents or initial drafts of memos and presentations related to the audit. Other audit firms have started to develop and deploy GenAI-enabled tools to assist staff with researching internal accounting, and auditing guidance. In the future, GenAI may potentially be used for assisting with summarising accounting policies and legal documents, evaluating the completeness [...]

What’s News? Your Content Goes Here The Companies Act was recently amended and signed into law by the President as Act 16 of 2024. It addresses the following: Enhanced director accountability: strengthened provisions for director responsibilities and liabilities Corporate governance: introduction of new requirements for corporate governance frameworks Shareholder rights: expanded rights and protection for minority shareholders Financial reporting: updated standards and requirements for financial disclosures and reporting Business rescue proceedings: revisions to the procedures and timelines for business rescue. It's concerning that the amendments to the Companies Act 2008 (Act 16 of 2024) did not update the [...]

What’s News? Your Content Goes Here The International Accounting Standards Board (IASB) has issued narrow amendments to IFRS Accounting Standards and accompanying guidance as part of its regular maintenance of the standards. These amendments, published in a single document, Annual Improvements to IFRS Accounting Standards—Volume 11, include clarifications, simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards. The amended standards are: IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 7 Financial Instruments: Disclosures and its Accompanying Guidance on Implementing IFRS 7 IFRS 9 Financial Instruments IFRS 10 Consolidated Financial Statements IAS [...]