Proposed IRBA Code Revisions for Sustainability Assurance

Posted 18 June 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The Independent Regulatory Board for Auditors (IRBA) has issued an Exposure Draft proposing the adoption of international ethics standards for sustainability assurance with specific South African enhancements.

The Independent Regulatory Board for Auditors’ (IRBA) Committee for Auditor Ethics (CFAE) has issued the Proposed Revised IRBA Code of Professional Conduct for Registered Auditors, Incorporating Ethics Standards for Sustainability Assurance (IESSA), including Independence Standards and the Standard on Using the Work of an External Expert. This Exposure Draft serves to adopt and prescribe the International Ethics Standards Board of Accountants’ (IESBA) framework for use by registered auditors in South Africa.

The proposed revisions introduce a framework designed to mitigate greenwashing and elevate the quality of sustainability information. Key regulatory components include:

  • New Sections 390 and 5390: Establishing an ethical framework for professional accountants and sustainability assurance practitioners to evaluate the competence, capabilities, and objectivity of external experts.
  • South African Enhancement Paragraph 5400.3b A1 SA: Clarifying that independence standards in Part 5 apply to engagements where any part of the reporting framework is general-purpose, ensuring a wide range of users’ information needs are met.
  • Equivalence: Aligning IESSA with the high independence standards found in Part 4A of the IESBA Code, which currently applies to financial statement audits.

Implementation Deadlines and Effective Dates

The IRBA has set a deadline for public comments on the Exposure Draft for 8 August 2025. Following the consultation period, the implementation of the revised Code will follow a phased approach:

  • General Revisions: Impacting sustainability assurance engagements for periods beginning on or after 15 December 2026.
  • Value Chain Provisions: Provisions in sections 5405 and 5406, applicable when assurance work is performed at a value chain component, will be effective for periods beginning on or after 1 July 2028.

The proposals also include specific provisions regarding fee disclosure requirements when a firm performs both financial statement audits and sustainability assurance engagements for the same client.

Click here to download the Exposure Draft: Revised IRBA Code with IESSA and Experts SA Enhancements.

What this means for you, your business, or your clients

  • For yourself: Registered Auditors must assess their own competence and objectivity when using external experts under the new sections 390 and 5390 to ensure compliance with the revised ethical framework.
  • For your business: Audit firms must update internal independence monitoring systems and fee disclosure protocols to account for the performance of both audit and sustainability assurance services for the same entity.
  • For your clients: Clients will need to review their sustainability reporting frameworks to determine if they meet the “general-purpose” criteria, which triggers the application of the more stringent Part 5 independence standards.

Originally published at https://accountingacademy.co.za/news/read/proposed-revised-irba-code-with-sa-enhancements-to-the-ethics-and-independence-standards-for-sustainability-assurance

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