Probe What s New Version 2016.20.23 June 2017
Index 1. Technical enhancements... 3 2. Probe Audit... 3 2.1. Compliance Changes... 3 2.2. Content improvements... 4 2.2.1. Discussions with those charged with governance (10.31)... 4 2.2.2. Engagement letter (10.21)... 4 2.2.3. Letter of representation (02.92)... 6 2.2.4. Probe MMX Companies Act 71 of 2008 compliance add-on... 6 2.2.4.1. Employee costs Remuneration paid to director (10.51 and 65.10)... 7 2.2.4.2. Group assistance (10.51 and 24.10)... 8 2.2.5. Other improveents... 9 3. Probe Review... 9 3.1. Compliance Changes... 9 3.2. Content improvements...10 3.2.1. Discussions with those charged with governance (10.31)...10 3.2.2. Engagement letter (10.21)...10 3.2.3. Letter of representation (02.92)...10 4. Probe Compilation... 10 4.1. Compliance Changes...10 5. Probe IFRS for and Measurement... 11 5.1. Content improvements...11 5.2. Compliance Changes...13 Probe What s New - Version 2016.20.23
1. Technical enhancements We improved the update technology to reduce the time spent on updating your firm and/or engagement files and to retain more data and / or customized procedures. Updating your firm and/or engagement file will now take less than 10 minutes. You will retain customization to your letters, checklists and work programs. You will inter alia retain the following: Inserted, modified or ignored procedures on work programs and checklists. Signed-off procedures on work programs and checklists. Comments or descriptions captured on work programs and checklists. Inserted, modified or ignored paragraphs on letters. The following documents is developed differently and therefore it will not retain data or customized procedures: 2.00 Partner sign-off 2.30 Overall analytical review 2.40 Evaluation of misstatements 2.92 Letter of representation 10.40 Time budget 10.51 Types and volumes of transactions 10.52 Preliminary analytical review 11.21 Laws and regulations 90.10 Blank work program 90.20 Substantive testing worksheet 90.30 Controls testing worksheet 90.40 Focused enquiries The following additional options were included to Probe Firm Settings for firm authors: The firm author can now choose to revert to default tabs after authoring to ensure that documents are on the default tab when opened by users after selecting the relevant engagement type. The firm author can now choose to run the data retention functionality in order for the firm added procedures to be saved in the library of procedures as firm procedures rather than user procedures. This will allow the template to update these procedures rather than adding duplicates of these procedures when updating client files where these procedures are already present. 2. Probe Audit 2.1. Compliance Changes The template release contains compliance changes relating to Non-Compliance with Laws and Regulations (hereafter referred to as NOCLAR ). The internal ethics standard Responding to Non-compliance with Laws and Regulations was issued by the International Ethics Standards Board for Accountants (hereafter referred to as the IESBA ) in July 2016. It provides a framework to guide all auditors and other professional accountants in what actions to take in the public interest when they become aware of a potential illegal act, known as NOCLAR, committed by a client or employer. The standard is effective on or after 15 July 2017. The following areas of Probe Audit were impacted: Document reference Document description 10.21 Engagement letter 10.30 Discussions with those charged with governance 3
Document reference Document description All Work programs - Conclusion 02.00 Partner sign-off 02.60 Senior s final checklist 02.70 Manager s final checklist 02.92 Letter of representation Further detail of the changes is available for existing users in the document What s New Probe Version 2016.20.23 - NOCLAR. It forms part of the Probe What s New Version 2016.20.23 document that will appear when you update your firm and/or engagement file. We advise that you download the aforementioned document for future reference. 2.2. Content improvements 2.2.1. Discussions with those charged with governance (10.31) Users encountered that 10.31 is blank when they create copies of the document. This was due to the user not selecting the interviewee. To make it easier for the user, we moved the selection of the interviewee to be the first selection of the document. Selection the interviewee allows the document to be populated with the relevant content. 2.2.2. Engagement letter (10.21) The automation of the engagement letter was improved. The user s selection of Sole practitioner/firm in the Information Store, will populate the content of the engagement letter to refer to either we or I. Find extract from 01.20 Information Store below. 4
When Sole practitioner is selected in the Information Store, the reference to the auditor in the engagement file will be singular. Refer extract from 10.20 below. When Firm is selected in the Information Store, the reference to the auditor in the engagement file will be plural. Refer extract from 10.20 below. Furthermore, the name of the audit firm captured in 01.20 Information Store will pull through to the signature area. 5
2.2.3. Letter of representation (02.92) To allow for one or more than one person to sign the Letter of representation, we added a question to indicate how many representatives will be signing the letter. The answer will populate the content of the letter to refer to either we or I. Extracts from 02.92 The Fraud paragraph was updated to correct incorrect wording. 2.2.4. Probe MMX Companies Act 71 of 2008 compliance add-on The audit procedures relating to the Companies Act of South Africa will always appear in Audit (Large). For Audit (Small) the user needs to select on 10.20 Engagement evaluation that he/she wants to apply the Probe MMX Companies Act add-on. 6
2.2.4.1. Employee costs Remuneration paid to director (10.51 and 65.10) The audit procedures relating to remuneration paid to directors and prescribed officers were amended to appear in the relevant circumstances. An additional line was added on 10.51 Types and volumes of transactions to provide for the instance where disclosure of director and prescribed officer remuneration per individual in the financial statements is required in terms of the Companies Act. When the user selects the tick box Remuneration paid to director the audit procedures relating to Remuneration paid to director will appear on 65.10. When the user selects the tick box Disclosure of director and prescribed officer s remuneration per individual required in the financial statements, the procedure highlighted in red will appear. 7
2.2.4.2. Group assistance (10.51 and 24.10) Audit procedures relating to loans or financial assistance to director, related or interrelated entities or persons were added to 24.10. To populate the procedures in the engagement file, the user needs to indicate on 10.50 Gathering Information that there are such loans or financial assistance. The user needs to indicate on 10.51 Types and volumes of transactions that the loan or financial assistance relates to loans to group companies. The relevant procedures will appear on 24.10. 8
2.2.5. Other improveents Document reference Work programs Tab reference N/a Conclusion 10.20 Terms of the engagement 10.51 Group companies Description of change The Hide this warning button was moved to the left of the warning to improve the visibility for users with low resolution PC s that previously did not see the warning when it was on the right of the screen. The heading of the tab Conclusion will be visible even when the user is scrolling down on the screen. The question Are we required to prepare the financial statements? will now appear irrespective of the answer to the question Were the financial statements independently compiled and reported on? This is to allow for the various possibilities, including the instance where the financial statements are compiled by an independent accounting professional AND the entity do not compile and report in accordance with an identified financial reporting framework. Investments in group companies. The options relating to Investment in group companies, i.e. additions and disposals of investments, will appear on 10.51 under Group Companies when the user maps account balances to: - Investment in subsidiary (Map 1.1.1.125.xxx) - Investment in JV (Map 1.1.1.126.xxx), and/or - Investment in Associates (Map 1.1.1.125.xxx) The formula was updated to achieve the aforementioned. Loans to and from group companies. The formula was updated to include current and non-current loans to and from group companies from the mapping database. Only non-current loans was included previously. 11.20 N/a The reference to company was changed from company to entity for instances that are applicable to other entities. 11.40 Identified risks and conclusion The description of the presumed risk was updated to not include the markers. 25.10/10.51 The procedures relating to loans or financial assistance will populated based on the answer on 10.51 and not 10.50. 40.10/10.51 The question relating to the Social and ethics committee will now appears on Audit (Small). 80.10/10.51 In the Audit (Small) profile, the procedures relating to segment information to only appear when the relevant question in 10.50 is answered yes. 02.40 In the Audit (Large) profile, the user can now jump to the instructions from the header of the document. Previously the user could only jump to instructions from within the document. 02.92 / 10.21 To improve visibility, the warning to appear in yellow at the top of the document when the user has ignored procedures/paragraphs. 3. Probe Review 3.1. Compliance Changes The template release contains compliance changes relating to Non-Compliance with Laws and Regulations (hereafter referred to as NOCLAR ). Refer to par 2 above for further information relating to NOCLAR. The standard is effective on or after 15 July 2017. 9
The following areas were impacted: Document reference Document description 10.21 Engagement letter 10.30 Discussions with those charged with governance All Work programs - Conclusion 02.00 Partner sign-off 02.60 Senior s final checklist Further detail of the changes is available for existing users in the document What s New Probe Version 2016.20.23 - NOCLAR. It forms part of the Probe What s New Version 2016.20.23 document that will appear when you update your firm and/or engagement file. We advise that you download the aforementioned document for future reference. 3.2. Content improvements 3.2.1. Discussions with those charged with governance (10.31) Refer par 2.2.1 above. 3.2.2. Engagement letter (10.21) Refer par 2.2.1 above. 3.2.3. Letter of representation (02.92) Refer par 2.2.3 above. 4. Probe Compilation 4.1. Compliance Changes The template release contains compliance changes relating to Non-Compliance with Laws and Regulations (hereafter referred to as NOCLAR ). Refer to par 2 above for further information relating to NOCLAR. The standard is effective on or after 15 July 2017. The following areas of Probe Compilation were impacted: Document reference Document description 06.21 Compilation engagement letter All Work programs - Conclusion 06.00 Practitioner sign-off 06.10 Compilation letter of representation Further detail of the changes is available for existing users in the document What s New Probe Version 2016.20.23 - NOCLAR. It forms part of the Probe What s New Version 2016.20.23 document that will appear when you update your firm and/or engagement file. We advise that you download the aforementioned document for future reference. 10
5. Probe IFRS for and Measurement 5.1. Content improvements To make compliance easier, we have updated the content with valuable feedback from our content provider, responding to some of the findings in the latest inspection report of regulators, as well as valuable feedback from our customers. The module was also updated with new and revised audit procedures relating to the revised International Financial Reporting Standard for Small and Medium-sized Entities effective for year ends commencing on or after 1 January 2017 (refer to par 5.2 below). The updated module includes the references to the revised IFRS for SME standard. Detail of the instances where the reference to the IFRS for SME standard effective for year ends commencing on or after 1 January 2017 differs from the 2009 IFRS for SME standard is summarized in the document Probe IFRS for SME Recognition and Measurement Module Standard references. You can obtain the document by using the link on 10.20 Engagement Evaluation when you have selected IFRS for SME as your financial reporting framework. We advise that you include the document in your engagement file when you perform an audit of a year end prior to the new standard s effective date to reflect that you are addressing the applicable standard. These improvements inter alia include: 5.1.1. The description of procedures on most of the work programs were improved to provide clearer guidance to taking into account the requirements of IFRS for SME, for example Item From To Deferred payment terms Inventory, purchases Other liabilities material financial Ensure that (for example a loan) that constitute, in substance, a financing transaction are recognised at the present value of future payments (SME11.13). Test cost prices of items by reference to invoices, ensuring that the correct method of costing is used and that appropriate cost elements have been included as required by International Financial Reporting Standard for Small and Medium-sized Entities (SME13.5&6). Review the lists and ensure that financial liabilities are correctly classified into basic financial instruments (SME11.8) and other financial instruments (SME12.3 5) for recognition and measurement purposes. Ensure that a transaction that constitute a finance transaction with deferred payment terms, is recognised at the present value of future payments discounted at a market rate of interest for a similar debt instrument as determined at initial recognition (SME11.13). Test cost prices of items by reference to invoices, ensuring that the correct method of costing is used and that the costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition have been included as required by International Financial Reporting Standard for Small and Medium-sized Entities. (SME13.5-6) Review the lists and ensure that financial liabilities are correctly classified into basic financial instruments (SME11.8-11.11) and other financial instruments (SME12.3-5) and that financial liabilities are identifiable as carried at amortised cost OR fair value. 11
Item From To Trade and other payables, significant and unusual creditors Ensure that current trade payables are recognised at the undiscounted amount of the consideration owed (SME11.13). Ensure that current trade payables are initially recorded at the undiscounted amount of the cash or other consideration owed, unless they contain a financing transaction (SME11.13). 5.1.2. With regards to Property, plant and equipment the following procedures were : Review the list of PPE and/or the fixed asset register for fully depreciated assets. Verify the reasonableness of the residual value determined by management. 5.1.3. Audit procedures relating to impairment and reversal of impairment were revised and extended on those work programs where impairment and/or reversal of impairment is relevant. The following procedures will appear on relevant work programs as a required procedure. - Ensure that management has made an assessment of whether or not there is an indication of impairment of assets (that are not carried at fair value) at reporting date. - Review any impairment indicators identified during the engagement and investigate if assets should be impaired. The procedures relating to impairment or reversal of impairment will appear on relevant work programs when Impairment or Reversal of impairment under the relevant financial statement item is selected on 10.51 Types and volumes of transactions. 5.1.4. Audit procedures relating to Share-based payments were expanded. To appear on 40.10 Capital and statutory when share based payments under Capital and Reserves on 10.51 Types and volumes of transactions is selected. 5.1.5. Audit procedures relating to Construction Contracts were added to 60.10 Revenue. To appear on 60.10 when the user selects Construction contracts under Revenue on 10.51 Types and volumes of transactions. 5.1.6. In the Audit (Large) profile, the conclusion section of all work programs were updated to include the following: Material change in accounting policy due to new standard/interpretation Material change in accounting policy to due change resulting in financial results providing more relevant and reliable. Change in accounting estimate. Prior period errors. You are reminded that for the extended conclusion to appear in Audit (Small), the user can select Show extended conclusion for small in the Probe Firm Settings. See screenshot below. 12
5.1.7. For Probe Premium Add-on users, further footnotes were added to provide further guidance to users, for example 20.10: Added factors that indicates changes in the residual value or useful life. 20.10: Added factors to consider when verifying the reasonableness of the useful life of assets. Further detail of the changes is available for existing users in the document What s New Probe Version 2016.20.23 IFRS for SME Recognition and Measurement 5.2. Compliance Changes The module was updated with the following new and revised audit procedures relating to the revised International Financial Reporting Standard for Small and Medium-sized Entities (hereafter referred to as IFRS for SMEs) effective for year ends commencing on or after 1 January 2017. Key changes to the recognition and measurement of items inter alia include: The revised standard allows for classes of property, plant and equipment to be carried at fair value, whereas the existing standard only permitted the cost model. Changes were made to 20.10 Property, plant and equipment as well as 10.51 Types and Volumes of transactions. Tax and deferred tax treatments per IFRS for SME aligned with treatment of IAS 12 Income Taxes. Changes were made to 50.10 Taxes and levies. If the useful life of goodwill or another intangible asset cannot be established reliably the useful life shall be determine based on management s best estimate but shall not exceed ten years. Changes were made to 23.10 Intangible assets. The new and revised audit procedures relating to the revised IFRS for SME Standard will appear in your engagement file if the yearend captured in CaseWare commences on or after 1 January 2017. Provision is not made for early adoption. Further detail of the changes is available for existing users in the document What s New Probe Version 2016.20.23 IFRS for SME Recognition and Measurement. It forms part of the Probe What s New Version 2016.20.23 document that will appear when you update your firm and/or engagement file. We advise that you download the aforementioned document for future reference. 13
Contact Us Important Details Register on the CaseWare Africa Success Community at to access to your firm s software. Click here to register now if you don t have a login. Visit our Community for easy access to frequently asked questions, upgrades, downloads and technical documentation. Click here to visit the CaseWare Africa Success Community. Log a helpdesk ticket Should you require further assistance you may log a support case via our Community once logged in. Click here to log a support case. Alternatively, you may log a support case via email on support@cqs.co.za Other details Email us at info@cqs.co.za regarding: Feedback Ideas on service or products Product information Account or license information Any other queries Follow us CQS Technology Holdings CQS Technology CQS Technology Holdings CQS Technology Holdings 14