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If a company is a listed company then the audit engagement can not serve for longer than 7 years and must do a cooldown and so can not be involved with the audit of that company for 2 years. correct?
Is there any such rule for non listed companies?
The rules state first:
Familiarity and self-interest threats are created by using the same senior personnel
on an audit engagement over a long period of time……… The signifcance of the threats shall be evaluated and safeguards applied when necessary to eliminate the threats or reduce them to an acceptable level. Examples of such safeguards include:• Rotating the senior personnel off the audit team.
The rules then go on to state:
In respect of an audit of a public interest entity, an individual shall not be a key
audit partner for more than seven years. After such time, the individual shall not
be a member of the engagement team or be a key audit partner for the client for
two years. During that period, the individual shall not participate in the audit of the
entity, provide quality control for the engagement, consult with the engagement
team or the client regarding technical or industry specifc issues, transactions or
events or otherwise directly in?uence the outcome of the engagement.[ie no specific time limit for non-public interest clients].
Thank you for your detailed answers! I really appreciate them!
Is there any place you pick up these rules from? Any site?
Another question,
In the case that a gift is trivial, who has to be informed of it before the auditor can accept the gift?
You can download from here – but don’t spend too long studying them:
https://www.accaglobal.com/my/en/member/standards/rules-and-standards/rulebook.html
The only reference to gifts is this:
Accepting gifts or hospitality from an audit client may create self-interest and
familiarity threats. If a firm or a member of the audit team accepts gifts or
hospitality, unless the value is trivial and inconsequential, the threats created
would be so significant that no safeguards could reduce the threats to an
acceptable level. Consequently, a firm or a member of the audit team shall not
accept such gifts or hospitality.It would be up to the auditing firm to lay down its own rules about who can decide if a gift is trivial.
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