Changes to the ACRA Code for Public Accountants and Accounting Entities

Commencing December 15, 2023, ACRA has enforced the freshly introduced stipulations outlined in the Accountants (Amendment) Act. The following are some of the pivotal alterations encapsulated within the Act:

ACRA Code:

1. Engagement Quality Review and Team Membership:

In an engagement quality review, independent reviewers who are not a part of the engagement team will assess the audit. Their role will be vital for ensuring audit quality and compliance without direct engagement involvement.

2. Specific Considerations in Group Financial Statement Audits:

Group engagement partners will be responsible for verifying that component auditors comprehend and adhere to the ethical independence requirements outlined in SSA 600 (Revised). This will be specifically for group financial statement audits, ensuring consistency and integrity across the audit process.

3. Communication and Ethical Requirements for Component Auditors:

The group engagement partners can request component auditors for communication. This will be regarding independence compliance. It aims to ascertain significant independence-related matters and the rationale behind their conclusion on acceptable threats to independence.

4. Handling Breaches by Component Auditors:

When a breach occurs with a component auditor and isn’t adequately resolved, the group auditor must not rely on their work. Alternate strategies like performing the audit internally or engaging a different component auditor become necessary to maintain the integrity of audit evidence.

5. Governance Approval and Consequences of Breach:

Should disagreements arise between governance and actions taken to rectify a breach at the component auditor firm, the group auditor can’t use their work for the group audit. This ensures governance alignment and ethical compliance in the audit process.

For accountants and accounting entities, these changes signify a shift in operational paradigms. There’s a call for heightened awareness, continuous education, and a recalibration of professional practices. Adhering to the updated code demands a proactive approach, incorporating these ethical principles into daily operations.

Moreover, these changes resonate beyond the realm of compliance. They carve a path toward greater accountability and credibility, fortifying the profession’s foundation and bolstering public trust. The code’s evolution isn’t merely a procedural update; it’s a transformative stride toward a more ethical and responsible accounting landscape. For more information about the changes to the ACRA code, refer here – The Accountants (Prescribed Standards and Code of Professional Conduct and Ethics) Order 2023

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