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Audit rotation & employment with client in key management position

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Audit rotation & employment with client in key management position

  • This topic has 4 replies, 2 voices, and was last updated 1 year ago by Justkeepswimming.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • April 25, 2024 at 10:49 am #704532
    Justkeepswimming
    Participant
    • Topics: 1
    • Replies: 2
    • ☆

    Hi,

    I am joining the ACCA AAA (Int) June 2024 exam.

    I would like to seek clarification for the following questions:

    1) For audit engagement partners,
    Is it 7 years of engagement and 5 years of cooling off period or
    5 years of engagement and 5 years of cooling off?

    2) For engagement quality reviewers,
    Is it 7 years of engagement and 3 years of cooling off period or
    7 years of engagement and 2 years of cooling off?

    3) The partners are only able to join the client’s key management position after 2 years of audit conclusion, do all assurance firm employees apply here as well?

    Thank you.

    April 25, 2024 at 11:17 am #704533
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8286
    • ☆☆☆☆☆

    A warm welcome to my forum! (Do you swim? It’s my only sporting activity.)

    Good questions …

    1) is “7 + 5” (R540.11 in the IESBA Code)
    2) is “7 + 3” (R540.12)

    In practice, the “tricky” issue is an audit engagement partner becoming the EQ reviewer – which is illustrated in this post https://opentuition.com/topic/cooling-off-period-listed-companies-engagement-partner-vs-key-audit-partner

    There is no time restriction, an individual has a right to work and an audit partner cannot be prevented from leaving a firm to work in industry. The point is, that the length of time would be relevant to evaluating the threat to independence – the shorter the time, the greater the threat. This then will determine the safeguards necessary to reduce the threat to an acceptable level.

    April 25, 2024 at 12:28 pm #704538
    Justkeepswimming
    Participant
    • Topics: 1
    • Replies: 2
    • ☆

    Thank you for the warm welcome 🙂

    Yes, I do, though my username was inspired by the famous quote from Finding Nemo hahaha XD
    That’s interesting ^^, swimming indeed is a good all-round activity! 😀 I enjoy it too!

    Thank you so much for the kind guidance on all the questions, appreciate your time and support.

    April 25, 2024 at 1:52 pm #704539
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8286
    • ☆☆☆☆☆

    You are most welcome! I check out the forums every day, so please don’t hesitate to ask questions.

    April 25, 2024 at 2:46 pm #704541
    Justkeepswimming
    Participant
    • Topics: 1
    • Replies: 2
    • ☆

    I will, thank you! 🙂

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • The topic ‘Audit rotation & employment with client in key management position’ is closed to new replies.

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