Revised Code of Ethics in the Phils - 2010

If the individual has served the auditclient as a key

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Unformatted text preview: t threats. The significanceof the threats will depend on factors such as: • How long any such partner has been associated with the audit client; 62 • The role, if any, of the individual on the audit team; and • The nature, frequency and extent of the individual’s interactions withthe client’s management or those charged with governance. 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 include: • Rotating the partner off the audit team or otherwise ending thepartner’s association with the audit client; or • Regular independent internal or external quality reviews of theengagement. 290.154 When an audit client becomes a public interest entity, the length of time theindividual has served the audit client as a key audit partner before the clientbecomes a public interest entity shall be taken into account in determiningthe timing of the rotation. [If the individual has served the audit client as akey audit partner for five years or less when the client becomes a publicinterest entity, the number of years the individual may continue to serve theclient in that capacity before rotating off the engagement is seven years lessthe number of years already served. If the individual has served the auditclient as a key audit partner for six or more years when the client becomes apublic interest entity, the partner may continue to serve in that capacity for amaximum of two additional years before rotating off the engagement.]If the individual has two or more years remaining on the maximum service period when the client becomes a public interest entity, the number of years the individual may continue to serve the client in that capacity before rotating off the engagement is the maximum service period allowed less the number of years already served (i.e., if maximum is seven years, then seven years less the number of years already served). If the individual...
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