Proposed Changes to Certain Provisions of the Code Addressing the Long Association of Personnel with an Audit or Assurance Client

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    Exposure Drafts and Consultation Papers

    IESBA

    Published: Aug 14, 2014
    29 Pages

    English

     

    Comments due by:
    Nov 12, 2014

    Find more publications & resources related to:
    independence, IESBA, Code of Ethics

    Proposed Changes to Certain Provisions of the Code Addressing the Long Association of Personnel with an Audit or Assurance Client

    The proposals in the Exposure Draft respond to stakeholder concern about the appearance of independence and the need to ensure that the threats created by the long association of audit firm personnel with an audit client are appropriately addressed on all audit engagements.

    The proposals aim to strengthen the independence provisions in the Code of Ethics for Professional Accountants (the Code). Among the proposed changes are:

    • Strengthened general provisions applicable to all audit engagements regarding the threats created by long association;
    • With respect to partner rotation, an increase in the mandatory “cooling-off” period, from two to five years, for the engagement partner on the audit of a public interest entity;
    • Strengthened restrictions on the type of activities that can be undertaken with respect to the audit client and audit engagement by any former key audit partner during the cooling-off period; and
    • A requirement to obtain the concurrence of those charged with governance regarding the application of certain exceptions to the rotation requirements.

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