Prudential Authority updates bank audit reporting requirements
The South African Reserve Bank's Prudential Authority has issued a proposed directive to update reporting requirements for auditors of banks. This directive specifies the Banks Act returns that must be audited or reviewed under regulation 46, replacing a previous 2024 directive.
Refining auditor obligations
Regulation 46 of the Regulations relating to Banks imposes specific reporting duties on auditors of banks, controlling companies, and branches of foreign institutions.
The purpose of this Proposed Directive is to detail the references to the Banks Act (BA) returns that require auditing, reviewing, or limited assurance engagements.
This update incorporates changes to specified BA returns resulting from amendments to the Regulations, which were gazetted on 26 June 2025 and implemented from 1 July 2025.
The directive is intended to replace Directive 2 of 2024, dated 8 March 2024, ensuring that auditor reports align with the latest regulatory framework.
Auditors are required to report annually, within 120 days of the financial year-end, on both quantitative and qualitative aspects of a bank's operations, including internal controls.
Standardizing assurance engagements
The Proposed Directive instructs auditors to perform audit, review, or limited assurance engagements on the respective BA returns specified in regulation 46(6).
These engagements must adhere to the detailed audit matrix provided in Annexure 1 (not included in the source document) for financial years ending on or after 1 July 2025.
Reports submitted to the Prudential Authority must be rendered in accordance with illustrative regulatory reports published by the Independent Regulatory Board for Auditors (IRBA).
For South African operations, these reports comprise Parts A to I, covering various types of audit, review, or limited assurance engagements, including specific risk returns.
Similar illustrative reports, Parts A to H, are provided for foreign operations, ensuring consistent reporting standards across all entities.
Clarity for compliance
This directive provides much-needed clarity for auditors navigating complex banking regulations.
By standardizing reporting frameworks, it enhances transparency and consistency in financial oversight.
While seemingly technical, such updates are crucial for maintaining robust financial stability within the banking sector.