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ISAE Attestation Version 1.391.0 February 2020

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Index

1. General ................................................................................................................................ 3

1.1. Features .............................................................................................................................................................. 3 1.1.1. Trial balance ................................................................................................................................................ 3 1.1.2. Placeholders ............................................................................................................................................... 3 1.1.3. Logo and letterhead ................................................................................................................................... 3 1.1.4. Queries ....................................................................................................................................................... 3 1.1.5. Corrections ................................................................................................................................................. 3 1.1.6. Did you know? ............................................................................................................................................ 3

1.2. Content ............................................................................................................................................................... 4

2. Legal Practitioner Trust Accounts – Compliance changes ...................................................... 5

2.1. Background ......................................................................................................................................................... 5 2.2. General changes ................................................................................................................................................. 5

2.2.1. Terminology ................................................................................................................................................ 5 2.2.2. References to legislation ............................................................................................................................ 5

2.3. Content of reports and letters ............................................................................................................................ 5

3. Legal Practitioner Trust Accounts – Content improvements .................................................. 6

4. Estate Agents Trust Accounts – Changes to legislation .......................................................... 8

4.1. Background ......................................................................................................................................................... 8 4.2. No changes to the template for the new Act ..................................................................................................... 8

5. Estate Agents Trust Accounts – Content improvements ........................................................ 9

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1. General

1.1. Features 1.1.1. Trial balance

Based on feedback from our users, the trial balance functionality has been switched off as this functionality is not used for these types of engagements.

1.1.2. Placeholders

Text placeholders have been added to letters and memos to prompt users to insert specific information related to the engagement. This is for example to populate the paragraph on Other Matters.

As an added benefit, the number of outstanding placeholders is shown at the top of the letter or memo. This can also be used to navigate the placeholders that have not been completed.

The app will warn users when printing and signing off the document that there are empty placeholders.

1.1.3. Logo and letterhead Firm authors can attach their logo and letterhead to the firm template. From there, the logo and letterhead placeholders can be used in letters and memos. Upon printing, the logo and letterhead attached to the template will print.

1.1.4. Queries

The Query Dashboard now has an additional column Contacts that displays the number of assigned contacts to each query document in the dashboard. Users can select the number to display a popup showing contact details. The popup also includes the Add contacts button so users can create a contact, if needed.

A notification displays for contacts once they answer all questions in the document. The notification message features the Mark Responded button so contacts can easily proceed to the next step in the workflow.

Similarly, a notification also displays for staff members once they accept all responses in the document. The notification message in this case features the Mark Complete button.

1.1.5. Corrections

The following matters were corrected:

• Fixed an issue related to review tools post a carry forward where some procedure responses were incorrectly marked as changed.

• The print icon has been removed from the Query page.

• Fixed an issue where placeholders navigation didn’t work in old content.

• Fixed an issue where the visibility icon ( ) was always available in a text section that has one or more lists with visibility settings.

• Fixed an issue when setting bulk print, where an error displays once you attempt to create a document group.

• Fixed an issue where text in document flagged Issues ( ) didn’t wrap.

• Fixed an issue in the Materiality document where the defined materiality amounts in are lost every time users leave the page or refresh.

• Fixed an issue where input notes for procedures in the Conclusions area didn’t show.

• Fixed a layout issue when allowing users to add rows outside of the dynamic table edit mode, the (+ Row) buttons didn’t align properly.

1.1.6. Did you know? You can use the review tools on a carry forward file to see the exact changes that have been made by us.

1. In a checklist or work program, click to enable review tools.

2. In the left sidebar you will see the heading Product content changes with two options.

3. Enable these options to see the added and modified procedures respectively.

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1.2. Content To make compliance easier, we have updated the content based on valuable feedback received from our users:

Matter identified Work program Comment

PLANNING

The Gathering of Information document is not always updated with the results of enquiries of those charged with governance, management and compliance officers. This could create a risk for the auditor if the information is not considered for risk identification, assessment and response.

230 The auditor is now prompted to obtain and consider the responses on 210.

AUTHORITATIVE REFERENCES

Authoritative references added as source of reference

Throughout Where appropriate, especially in planning, references to ISAE 3000 were added.

Where appropriate, references to the relevant Act and/or Rule were added to the procedure that the Act and/or Rule relates to. The abbreviations used are: • Estate Agency Affairs Act: EAAA • Legal Practitioner’s Act: LPA • Legal Practice Council Rules: LPC

Due to current limitations with the technology, it is not possible to add a condition to the authoritative reference to only show for estate agent’s trust accounts or legal practitioner’s trust account(s) based on the user’s selection in 110. Therefore, in some instances, the reference of both the EAAA and the LPA/LPC will appear.

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2. Legal Practitioner Trust Accounts – Compliance changes

2.1. Background The Independent Regulatory Body for Auditors (IRBA) released the Proposed Guide for Registered Auditors: Engagements on Legal Practitioners’ Trust Accounts (Revised November 2019) on 22 November 2019.

This proposed Revised Guide has been updated for the following:

• The Legal Practice Act, No. 28 of 2014 (the LPA) effective from 1 November 2018.

• The Legal Practice Council Rules (the LCP) effective from 1 November 2018.

• The IRBA Code of Professional Conduct for Registered Auditors (Revised November 2018).

It is expected that the Revised Guide will be finalised in the first quarter of 2020 and that the effective date will be for financial periods commencing on or after 1 March 2019.

The previous version of SE Attestation (hereafter referred to as the “application”) already included content related to LPA and LPC as the effective date for both was 1 November 2018. The content in the application is now updated based on the proposed Revised Guide. Key changes are described below.

2.2. General changes 2.2.1. Terminology

The LPA and the proposed Revised Guide use the term “Legal Practitioner” in the place of “Attorney”. Therefore, the application now uses the term “legal practitioner” in all working papers, reports and letters, regardless of the legislation applicable to the period of the engagement.

In line with the above, the following further terminology changes have been effected:

• “the Council” is now reflected as “the Legal Practice Council”;

• “practitioner” is now reflected as “legal practitioner”; and

• “Legal Practitioner’s Annual Statement on Trust Accounts” replace “Attorney’s Annual Statement on Trust Accounts”.

2.2.2. References to legislation

The reporting sections included in the reports and letters in the previous version of the application was based on Schedule 8 of LPC Rules 9 July 2018. The content of the reports was discussed with the Legal Practice Council (LPC) to determine the format and content of the reasonable assurance report for the interim period.

The reporting sections included in the reports and letters in the proposed Revised Guide differs from the reporting sections in Schedule 8 of LPC.

The reporting sections have been amended in the application to align with the proposed Revised Guide.

2.3. Content of reports and letters The content of the following documents have been updated to align with the wording in the proposed Revised Guide:

• 130 The Letter of Engagement (as per Appendix 2 of proposed Revised Guide).

• 920 Representation Letter (as per Appendix 3 of proposed Revised Guide).

• 930 The Independent Auditor’s Reasonable Assurance Report on Legal Practitioners’ Trust Accounts (as per Appendix 4 and 5 of proposed Revised Guide).

• 942 The Legal Practitioner’s Annual Statement on Trust Accounts (as per Appendix 6 of proposed Revised Guide).

Document 130, 920 and 930 include footnotes that refers to the rules applicable from 1 November 2018. The footnotes were included as they are included in the appendixes noted above. The indication from one of our content providers are that the LPC require the inclusion of the footnotes in the reasonable assurance report.

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3. Legal Practitioner Trust Accounts – Content improvements To make compliance easier, we have updated the content with the following changes to align with the illustrative procedures in the proposed guide, and valuable feedback received from our users:

Matter identified Work program Comment

PLANNING

Updated guidance on materiality in the context of legal practitioner trust account engagements.

181 The guidance has been updated to include the additional guidance provided in the revised guide.

Enhance the questions directed to those charged with governance and/or management.

210 Questions relating to the following matters have been added or refined: completeness of trust and business banking accounts and the legal practitioner’s understanding of the applicable legislation.

Bank confirmations – general trust and general savings accounts

230 The auditor can now elect to obtain bank confirmations for general trust and general savings accounts. Based on the selection, appropriate procedures will appear in 421 either for bank confirmations or other external confirmations from financial institutions.

Please take note that obtaining bank confirmations is a recommended procedure in the proposed IRBA Guide and that the auditor state in their report that their reasonable assurance engagements include the following procedure: “Testing and/or scrutinising bank reconciliations, as considered appropriate in the engagement circumstances, and evaluating the records made available to us against the external confirmations from financial institutions”

Disclosures required by the Legal Practice Council

230 Sub-procedure added in relation to the legal practitioner’s annual financial statements and disclosures as required by the Legal Practice Council.

EXECUTION

Adding additional procedures to align with proposed Revised Guide

411 Procedures added relate to: • The maintenance and storage of investment practice

accounting records. • The maintenance, storage and retrieval of electronically

stored records. • The off-site hosting of records. • The separation of business and trust banking accounts

and accounting. • Accounting of advance receipts. • Inquiries to the Legal Practice Council and/or the Fidelity

Fund regarding any complaints that may have been received in respect of the management of trust monies by the firm.

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Matter identified Work program Comment

421 Procedures added relate to: • The identification and timing of individual transfers from

trust to business. • The depositing of trust monies into banking accounts with

financial institutions with which the Fund has arrangements.

• Other external confirmations from financial institution(s) when auditor elected not to obtain bank confirmations for general trust and general savings accounts on 230.

• The completeness of banking accounts accounted for by the legal practitioner.

• Reconciling items on the bank reconciliation and their possible impact on a trust deficit.

• Unknown or unclaimed amounts older than one year. • Retention of trust creditor lists for a period of 5 years. • Verification of bank charges against details on the Fund’s

website. • Agreeing of interest received to supporting

documentation and the payment thereof to the Fund in accordance with the various LPA provisions that relate to the type of banking account.

431 Procedures added relate to: • Mandates for and authorisation of investment

transactions and confirmation of deposits/investments. • The termination, early termination or expiry of

investments and renewal of mandates where applicable. • Obtaining IT3(b) certificates or external confirmations

and compare it to the interest reconciliation. • The levying and calculation of the 5% interest due to the

fund on trust investments accounts, and the payment thereof to the Fund.

CONCLUDING AND REPORTING

Non-compliance with laws and regulations.

820 Add procedure for auditor’s consideration of and actions relating to identified instances of non-compliance with laws and regulations.

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4. Estate Agents Trust Accounts – Changes to legislation

4.1. Background The Property Practitioner’s Act, Act 22 of 2019, (hereafter referred to as the “PPA”) was signed into legislation on 19 September 2019, and, once effective, will replace the Estate Agency Affairs Act, Act 112 of 1976. No effective date has been communicated yet. In terms of the PPA the Property Practitioners Regulatory Authority (previously the Estate Agency Affairs Board) is required to publish the rules related to the PPA.

4.2. No changes to the template for the new Act The PPA was researched in respect of anticipated changes to the auditor’s reporting responsibilities and procedures related to the estate agent’s reporting and compliance. Due to the lack of clarity regarding the implementation date of the PPA and the related rules, no changes have been made to the application in this release.

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5. Estate Agents Trust Accounts – Content improvements To make compliance easier, we have updated the content with valuable feedback received from our users:

Matter identified Work programs amended

Comment

PLANNING

Estate agents that provide property management services sometimes make use of a service provider to provide a property management platform for management of rental portfolios.

230 Added procedure related to: • The use of a service organisation by the estate agent. • The type and content of the report issued by the

service organisation’s auditor (hereafter referred to as the ISAE3402 report).

• The auditor’s decision to place reliance on the content of the ISAE3402 report to perform the control risk assessment.

250 Procedures added to identify controls noted in the ISAE3402 report and to consider the conclusion reached by the service organisation’s auditor with regards to their design and implementation. To conclude whether these controls will be tested and the impact of the design and implementation of these controls on the auditor’s assessment of the control risk.

CONCLUDING AND REPORTING

Auditors are required to upload their reports and other information on the EAAB portal.

960 (NEW) New checklist added to enable the auditor to timeously prepare all the documentation and information required for the electronic submission.

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