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Unformatted text preview: ; • Whether the client’s management team has changed; and • Whether the nature or complexity of the client’s accounting andreporting issues has
changed. The significance of the threats shall be evaluated and safeguards appliedwhen necessary to
eliminate the threats or reduce them to an acceptablelevel. Examples of such safeguards
• Rotating the senior personnel off the audit team; • Having a professional accountant who was not a member of the auditteam review the work
of the senior personnel; or • Regular independent internal or external quality reviews of theengagement. Audit Clients that are Public Interest Entities
290.151 In respect of an audit of a public interest entity, an individual shall not be akey audit partner for
more than seven years, unless a shorter number of years in service is required by a regulatory
body. After such time, the individualshall not be a member of the engagement team or be a key
audit partner forthe client for two years. During that period, the individual shall notparticipate
in the audit of the entity, provide quality control for theengagement, consult with the
engagement team or the client regardingtechnical or industry-specific issues, transactions or
events or otherwisedirectly influence the outcome of the engagement.
290.152 Despite paragraph 290.151, key audit partners whose continuity is especiallyimportant to audit
quality may, in rare cases due to unforeseen circumstancesoutside the firm’s control, be
permitted an additional year on the audit team aslong as the threat to independence can be
eliminated or reduced to an acceptablelevel by applying safeguards. For example, a key audit
partner may remain onthe audit team for up to one additional year in circumstances where, due
tounforeseen events, a required rotation was not possible, as might be the case dueto serious
illness of the intended engagement partner.
290.153 The long association of other partners with an audit client that is a publicinterest entity creates
familiarity and self-interes...
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This document was uploaded on 04/03/2014.
- Spring '14