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