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 [...]

What’s News? Your Content Goes Here The IRBA Education Department is taking significant steps to enhance the appeal and accessibility of the auditing profession. These efforts align with Leaf Quality Systems' values of empowering future auditors to reach their full potential. To attract new talent and support aspiring auditors, the Independent Regulatory Board for Auditors (IRBA) is keeping trainee levies steady and waiving registration fees for the Audit Development Programme (ADP). These measures aim to remove financial barriers and foster a more inclusive environment for Registered Candidate Auditors. Purpose and goals of the ADP The ADP is designed [...]

What’s News? Your Content Goes Here Engagement Quality Reviews (EQRs) are a crucial aspect of audit quality, and compliance with the International Standards on Quality Management (ISQM) and the International Standards on Auditing (ISA). By carefully selecting engagements for EQR, audit firms can ensure that the engagement partner receives the assistance and objective evaluation needed to address challenging issues, make informed judgments, and ultimately enhance the reliability and credibility of the audit report. The role of the engagement partner in EQR The engagement partner is responsible for the overall quality of the audit engagement. This includes ensuring that [...]

Your Content Goes Here The depth of evidence is relevant when conducting audit procedures, EQR reviews, and system and engagement monitoring. ISA 500 (Audit Evidence): Paragraph 6 states the necessity for auditors to obtain sufficient and appropriate audit evidence to form the basis for an audit opinion. ISQM 1: Paragraph 32 outlines the requirement for firms to establish a monitoring and remediation process that evaluates the system of quality management's design, and operation. ISA 220 (Revised) (Quality Management for an Audit of Financial Statements): Paragraph 27 discusses the role of the engagement quality reviewer in evaluating significant judgments and [...]

Your Content Goes Here EQR reviews, previously known as ISQC1 reviews under ISQC1, are required when certain requirements of ISQM1, the Code, and firm policy are met, or when an EQR review acts as a safeguard against a threat to audit quality. Its importance should not be underestimated, as there are numerous benefits to be obtained. Audit engagement files to be subject to EQR reviews need to be identified as soon as possible after the acceptance or continuance of an engagement to ensure the necessary resources are available to perform the review. These resources may be internal or external, [...]

Your Content Goes Here Scepticism as an enquiring attitude towards information or an expression of doubt is a very broad requirement, especially when addressing fraud risk in audits. In order for the audit team to apply scepticism, or question information before them, they need to be aware of the type of misstatements that may occur, due to error or fraud. Some team members should at least have prior experience in processing records, advising clients, and completing tax and VAT returns. They need to take a keen interest in business failures that occur and the root causes. Fraudsters and bookkeepers [...]