SAICA Communication Transitional arrangement LPA and LPC Rules

The implementation of the LPA and LPC Rules on 1 November 2018 has resulted in the auditor having two sets of criteria against which to evaluate the underlying subject matter. These criteria are the AA and the Uniform Rules up to 31 October 2018 and then the LPA and LPC Rules from 1 November 2018 to the relevant year end.

As a transitional arrangement, the LPC has issued the annexed illustrative auditor’s report, which effectively requires the auditor to report on the compliance with the related sections of both the AA and the Uniform Rules, as well as the LPA and LPC Rules for the respective period. This transitional arrangement applies for financial years where both the AA and LPA were effective. In issuing this clarity, the LPC has made it clear that the scope of the audit will not result in any duplication of testing.

The purpose of this SAICA communication is to inform members of the transitional arrangements determined by the LPC. The annexed illustrative auditor’s report is a replica of that contained in the notification received by SAICA from the LPC and has not been modified in anyway. To this end, we draw members’ attention to the fact that the Basis for Opinion paragraph has not been updated for the Revised IRBA Code. As indicated above, the provision of guidance on how auditors should update the auditor’s report in terms of the Revised IRBA Code is beyond the scope of this communication. Auditors are referred to South African Auditing Practice Statement (SAAPS) 3, Illustrative Reports (Revised May 2019) for further guidance on this.