Revised Code of Ethics in the Phils - 2010

If the individual has served the audit client as a

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Unformatted text preview: he length of time the individual has served the audit client as a key audit partner before the client becomes a PIE shall be taken into account in determining the timing of the rotation. If the individual has served the audit client as a key audit partner for five (5) years or less when the client becomes a PIE, the number of years the individual may continue to serve the client in that capacity before rotating off the engagement is seven (7) years less the number of years already served. If the individual has served the audit client as a key audit partner for six (6) or more years when the client becomes a PIE, the partner may continue to serve in that capacity for a maximum of two (2) additional years before rotating off the engagement. [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 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: 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 pre-defined period, normally no more than five years; and B. Such an individual rotating after a pre-defined period should not participate in the audit engagement until a further period of time, normally two years, has elapsed.] Because of the current regulations that require a shorter period of service for certain partners as compared to the seven years as proposed by IESBA Code, the second and third sentences of the paragraph were modified to read: “If the individual has two or more years remaining on the maximum service period when the client becomes a public interest entity, the number o...
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This document was uploaded on 04/03/2014.

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