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You are an audit senior of Bark and co and have been allocated to the audit of Foliage co a listed company which has been an audit client for 8 years and specialses in manufacturing musical instruments. Jane leaf was audit engagement partner for Foliage and as she had completed 7 years as the audit engagement partner she has recently been rotated off the audit engagement . The current audit partner has suggested that in order to maintain a close relationship with foliage Jane leaf should undertake the role of EQCR this year.
What is the most appropriate response to the suggestion that Jane leaf takes on the role of EQCR?
a)Jane lead could take review role immediately but additional safeguards will be required
b)Jane lead could take review role immediately
c)Jane leaf should not serve as independent review partner for a period of atleast 2 years
d) Bark and co will need to consider resigning as auditor of FoliageSir correct ans is C but please can you explain
It’s simply the rule. After 7 years don’t go back to the role for at least 2 years.
Hi Sir, may I know the cooling off period for EQCR isn’t should be 3 years?The answer of C at least 2 years why is the answer?cooling off period of 2 years isn’t it for key audit partner instead of EQCR?
TQVM?
The original post is May 2018 before the changes to the “Long Association Provisions” of the Code were examinable.
The cooling off period is now 5 years for engagement partners, 3 years for EQCR partner and 2 years for any other key audit partner (if any).
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