Partner rotation

The IESBA (International Ethics Standards Board for Accountants) Code of Ethics for Professional Accountants now states 7 years is allowed. However, from ACCA:

The APB issued a revised Ethical Standard 3: Long Association with the Audit Engagement in October 2009. This now enables audit committees to decide that a degree of flexibility, which allows the audit engagement partner to remain on the audit for an additional two years, is necessary to maintain audit quality as long as this extension is disclosed to shareholders. Whilst the normal audit rotation period remains five years with five years when he or she does not participate in the audit afterwards, additional guidance has been introduced to allow some flexibility over the timing of rotation.

The revision is not intended to change the basic requirements but rather to allow flexibility in exceptional circumstances when the audit committee (or equivalent) considers that the timing of rotation may impact the quality of the audit. In such circumstances the audit engagement partner may continue in that position for up to a further two years.

Hi Ken,

Are the 7 years still valid?

Regards

Hi ken,

My question with regard to above is , if i write an engagement partner should be rotated every 5 years (Instead of 7) with a break of 2 years ( cooling off period) in the answer , would that be wrong?

Thanks