IRBA EAR Rule to enhance the transparency of auditors’ reports on annual financial statements of public interest entities

The Independent Regulatory Board for Auditors (IRBA) has prescribed the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities (EAR Rule). The EAR Rule applies to audits of annual financial statements of public interest entities, as defined in the IRBA Code of Professional Conduct for Registered Auditors and is effective for periods ending on or after 15 December 2024. Early adoption is permitted. The EAR Rule prescribes information that should be included in the auditor’s report in addition to the requirements of the International Standards on Auditing.

The IRBA also published Staff Audit Practice Alert 9, Guidance on the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities which provides guidance on how the EAR Rule may be applied.

The IRBA furthermore released Exposure Draft: Proposed South African Auditing Practice Statement (SAAPS) 3 (Revised), Illustrative Reports. The proposed amendments to SAAPS 3 incorporate, amongst others, amendments that address the application of the EAR Rule. Comments on the exposure draft closes on 30 November 2023.

Registered auditors are urged to familiarise themselves with the EAR Rule, Staff Audit Practice Alert 9 and the proposed amendments to SAAPS 3.

Comments on the revision to SAAPS 3 should reach the IRBA by 30 November 2023.