Instituut van de Bedrijfsrevisoren - Institut des Réviseurs d'Entreprises

Prior to the enactment of the Audit Act of 2016, the Belgian Institute of Registered Auditors (IBR-IRE)—the professional accountancy organization for auditors—was responsible for conducting a mandatory QA review system in the jurisdiction for all audits. When functioning, it was in line with SMO 1 requirements.

The Audit Act of 2016 stipulates that a quality assurance (QA) review system for all audits be stablished and operated by the Belgian Audit Oversight College (BAOC). IBR-IRE conducted an assessment of BAOC’s QA review system and reports that it is fully aligned with the main requirements of SMO 1

While IBR-IRE does not have legal authority to establish and operate the mandatory QA review system, the institute is responsible for the development of auditing standards and has adopted ISQC 1 for application. IBR-IRE included quality control standards in its initial and continuing professional development programs.

It also assists its members with the implementation of the quality assurance requirements by developing various activities, including training, continuing professional development sessions and issuing implementation guidance. IBR-IRE has also developed ongoing communication with the public oversight in Belgium.

In September 2020, the IAASB approved its new and revised suite of Quality Management standards (International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements; International Standard on Quality Management 2, Engagement Quality Reviews; and International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements). In January 2021, IBR-IRE began the process of translating the new and revised suite of Quality Management standards which will be used as a basis for their adoption into Belgian law by the end of 2022.

IBR-IRE is encouraged to promote awareness of the newly established BAOC QA review system. Since the new suite of Quality Management standards that will become effective in 2021-22, it will require significant change management for regulators and firms. To prepare auditors in the jurisdiction for the implementation of the standards, IBR-IRE is encouraged to closely follow the developments and publication of implementation support materials, raise awareness of its members about the forthcoming change, and update its educational programming to ensure that its members are sufficiently prepared for the application of the standards once they become effective.

Current Status: Review & Improve

For auditors, the Act Regarding the Organization and Supervision of Statutory Auditors of 2016 stipulates initial and continuing professional development (IPD and CPD) requirements. Under the Act, IBR-IRE, under the supervision of the Belgian Audit Oversight College (BAOC), is delegated with the authority to (i) approve and register statutory auditors and audit firms; and (ii) provide CPD for auditors. Overall, while most of the requirements of earlier versions of the IES appear to be in place in Belgium, further information is needed to assess the extent of alignment and incorporation of the 2019 IES requirements, which emphasize learning-outcomes approaches.

IBR-IRE reports in its SMO Action Plan that it conducted a review of IES between 2009-2012, as well as in 2015 but did not have to take any specific action to incorporate the new requirements since the existing requirements were more stringent. It remains unclear if IBR-IRE established plans to conduct a review of 2019 IES which became effective January 2021.

IBR-IRE indicates in its SMO Action Plan that it continues to support members by organizing roughly 85 annual conferences and information sessions in French and Dutch to help members fulfill the 120 hours of CPD requirement over a three-year period. It also participates in the work of the Common Content which entails nine of Europe’s accountancy institutes working together to harmonize professional qualifications.

IBR-IRE is encouraged to conduct a comprehensive review of the existing educational requirements in the jurisdiction against those of 2019 IES. For areas of less than full compliance, specific actions to close the gaps, if any, with a defined timeframe should be developed and included in its SMO Action Plan. The IES Checklist and the Accountancy Education E-Tool developed by IFAC may be used to conduct an assessment and to consider available implementation support materials.

Current Status: Execute

IBR-IRE is responsible for setting auditing standards, and reports on its website that ISA have been applicable in Belgium since 2009. IBR-IRE developed an ongoing process to review new and revised pronouncements issued by the International Auditing and Assurance Standards Board (IAASB). As of 2020, the 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is now applicable in the jurisdiction. IBR-IRE completed a French translation of the 2018 Handbook in September 2019.

The institute has developed a range of activities to raise the public’s awareness of ISA and assist its members with the implementation of the auditing standards via tools such as the “Revidocs” or the “Petites Entités-Kleine Entiteiten” (Pack PE-KE). The Pack PE-KE was developed in 2013 (last updated in 2019) to facilitate the implementation of ISA requirements for small entities. As for Revidocs, which was based on the NBA Netherlands tool “Verklaringengenerator”, it was completed in 2019 to guide auditors in preparing their audit reports.

Amongst others, the IBR-IRE has developed an ISA implementation manual and provides continuing professional development courses on this topic. It also developed auditing standards for small and medium-sized entities which were approved by all relevant stakeholders in 2019.

Lastly, IBR-IRE reports that it regularly meets with Accountancy Europe to provide comments on IAASB Exposure Drafts.

Current Status: Sustain

The Audit Act of 2016 contains the general ethical rules applicable to the registered auditor (with respect to any engagement) as well as the conceptual framework approach. Responsibility for implementation of ethical requirements for auditors lies with IBR-IRE. Additional ethical provisions applicable to the statutory auditor are included in the Belgian Code for Companies and Associations. As of the date of the assessment, the extent of alignment of ethical requirements in the Audit Act of 2016 with the 2018 International Code of Ethics for Professional Accountants remains to be established.

IBR-IRE provides input to legislation pertaining to ethical provisions upon request of the government (most recently provided in 2016). It also assists its members with the implementation of ethical requirements by issuing implementation guidance and delivering continuing professional development courses. IBR-IRE reports that it delivered 4 seminars between 2016-2020 pertaining to ethical requirements for registered auditors, and disseminated the 2018 IESBA Code of Ethics for reference during the seminars.

Lastly, IBR-IRE contributes to the standard-setting activities of the IESBA by participating in regional consultations.

The 2018 Handbook became fully effective in December 2019, and includes revised standards ISA 250 and 540. IBR-IRE is encouraged to clarify the extent of alignment of ethical requirements in the Audit Act of 2016.

Current Status: Execute

With no direct responsibility for adoption of public sector accounting standards, IBR-IRE focuses its efforts on promoting the standards to government officials. IBR-IRE reports that it meets with the government on a regular basis to promote awareness of the standards and has been publishing articles since 2013 to promote the use of IPSAS/ European Public Sector Accounting Standards (EPSAS) by public sector entities.

In 2014, it jointly established the Public Accounting Commission with the Institute of Accountants and Tax Consultants (IEC-IAB) to (i) follow up with government authorities on IPSAS adoption; (ii) contribute to the developments of European Public Sector Accounting Standards (EPSAS) to encourage alignment with IPSAS; and (iii) provide training activities to assist members with the implementation of standards for a smooth transition process from “cash accounting” to “accrual basis accounting”.

In 2012, IBR-IRE established an IPSAS/EPSAS working group to coordinate its activities in promoting the standards to relevant stakeholders. The group comprises registered auditors with a specific knowledge in local and/or international public sector accounting, and most recently met in 2018.

Current Status: Sustain

Under the Audit Act of 2016, IBR-IRE has no responsibility for investigation & discipline (I&D), since I&D is under the purview of the Belgian Audit Oversight College (BAOC). Prior to the establishment of the BAOC, IBR-IRE conducted a self-assessment of its own I&D system and reported gaps in (i) administrative processes; (ii) public interest considerations; (iii) liaison with outside bodies; and (iv) regular review of implementation and effectiveness.

Since the BAOC’s system has only recently been established and operationalized, the extent of alignment with SMO 6 requirements remains unclear.

Disciplinary measures and sanctions can be imposed by the Commission of Sanctions of the Financial Services and Markets Authority (FSMA) which is responsible for the ultimate decision about the imposition of sanctions against registered auditors, including removal from the public register of auditors.

IBR-IRE is encouraged to collaborate with BAOC to conduct a comparison of the BAOC I&D review system with SMO 6 requirements, consider gaps, and establish plans to eliminate any identified gaps. It is also encouraged to promote awareness of the newly established BAOC I&D review system and clarify its role in I&D. Lastly, IBR-IRE is encouraged to elaborate on actions it undertakes around supporting the regulator with understanding SMO 6 requirements, and members with understanding I&D processes.

Current Status: Review & Improve

With no direct responsibility for adoption of IFRS, IBR-IRE focuses on supporting its members with implementation and application by offering seminars and continuing professional development courses (CPD) on the standards and developments in the area. It also supports members with information, tools, and professional literature via the Journal de Stage and website.

IBR-IRE established ongoing processes for monitoring changes to the standards and pronouncements issued by the IASB and promptly raises members’ awareness through its magazine.

Lastly, IBR-IRE reports to provide comments on Exposure Drafts at the national level, as well as the international level (IASB) via its participation in the IFRS subgroup of the national standard-setter.

Current Status: Sustain