Content of a Transparency Report

07 September 2022
Auditing and Assurance
South African Accounting Academy

This IRBA staff audit practice alert applies to all firms, as defined in terms of the Auditing Profession Act 26 of 2005, as amended (APA).

Further, this IRBA staff audit practice alert supersedes the IRBA communiqué issued on 27 July 2018 titled “Transparency reports will strengthen confidence in audit firms”.

While transparency reports are not currently mandatory in South Africa, they may become mandatory for certain firms, in terms of the IRBA exposure draft published on 14 June 2022 and in Government Gazette 46649 (Board Notice 302 of 2022). Therefore, this staff alert should be read in conjunction with these abovementioned notices and any final rule that might be published by the IRBA in the future.

ISQM 1 requires that a firm communicates relevant and reliable information to external parties. This is informed by an increased need for external parties to understand a firm’s system of quality management.

Further, it is in a firm's interest to be transparent, and for the audit industry to further embrace the attitude of disclosure and transparency that generates confidence among users.

This IRBA Staff Audit Practice Alert, therefore, serves to provide auditors with a framework that describes the content of a transparency report that may be used to communicate relevant and reliable information to external parties, as envisioned by ISQM 1.

It covers the following topics:

Content of a transparency report;
Alignment to the requirements and terminology in the Quality Management standards;
Applicability of the IRBA Staff Audit Practice Alert;
Timing of the transparency report;
Name of the transparency report;
Relevance and reliability of the disclosures in the transparency report;
Accountability for the transparency report;
Firms merging or separating before a transparency report is issued; and
Publication of a transparency report.

Click here to download the 9-page Staff Alert:

https://www.irba.co.za/upload/IRBA%20Staff%20Audit%20Practice%20Alert%207_Content%20of%20a%20Transparency%20Report.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

This IRBA staff audit practice alert applies to all firms, as defined in terms of the Auditing Profession Act 26 of 2005, as amended (APA)
As an auditor and independent reviewer, you need to consider all publications by IRBA (as the regulating body) for guidance on relevant topics.
It is in a firm's interest to be transparent, and for the audit industry to further embrace the attitude of disclosure and transparency that generates confidence among users.

Relevance to Your clients:

For information purposes only – it is in a firm's interest to be transparent, and for the audit industry to further embrace the attitude of disclosure and transparency that generates confidence among users.

To stay current with all the latest changes and updates subscribe to our Monthly Compliance and Legislative Update series for R 250.00 per month. This gives you access to a monthly 2-hour webinar and monthly newsletter:
https://accountingacademy.co.za/profession/monthly-legislation-update

Get all your CPD online. SA Accounting Academy (SAAA) offers Subscription Plans, Live Webinars, Webinars On-Demand, Access to Experts, Courses, Articles and more:
https://cpd.accountingacademy.co.za.