Assurance team or otherwise advise as necessary or b

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: nature of the assurance engagement. The significance of the threat should be evaluated and, if the threat is other than clearly insignificant, safeguards should be considered and applied to reduce the threat to an acceptable level. Such safeguards might include: (a) Rotating the senior personnel off the assurance team; (b) Involving an additional professional accountant who was not a member of the assurance team to review the work done by the senior personnel or otherwise advise as necessary; or (c) Independent internal quality reviews. Financial Statement Audit Clients that are Listed Entities or Public Interest Entities 290.154 Using the same engagement partner or the same individual responsible for the engagement quality control review on a financial statement audit over a prolonged period may create a familiarity threat. This threat is particularly relevant in the context of the financial statement audit of a listed entity or public interest entity and safeguards should be applied in such situations to reduce such threat to an acceptable level. Accordingly in respect of the financial statement audit of listed entities and public interest entities: (a) The engagement partner and the individual responsible for the engagement quality control review should be rotated after serving in either capacity, or a combination thereof, for a period, no more than five years; and (b) Such an individual rotating after such period should not participate in the audit engagement until a further period of two years, has elapsed. 290.155 When a financial statement audit client becomes a listed entity the length of time the engagement partner or the individual responsible for the engagement quality control review has served the audit client in that capacity should be considered in determining when the individual should be rotated. However, the person may continue to serve as the engagement partner or as the individual responsible for the engagement quality control review for two additional years before rotating off the engagement. 290.156 (1) While the engagement partner and the individual responsible for the engagement quality control review should be rotated after such a predefined period, some degree of flexibility over timing of rotation may be 74 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS necessary in certain circumstances. Examples of such circumstances include: (a) (b) Situations when, due to the size of the firm, rotation is not possible or does not constitute an appropriate safeguard; and (c) (2) Situations when the person’s continuity is especially important to the financial statement audit client, for example, when there will be major changes to the audit client’s structure that would otherwise coincide with the rotation of the person’s; Situations when a regulatory authority empowered by law expressly allows such flexibility. In all such...
View Full Document

Ask a homework question - tutors are online