Download presentation
Presentation is loading. Please wait.
Published byChastity Hart Modified over 8 years ago
1
Page 1 | Proprietary and Copyrighted Information Long Association Task Force Marisa Orbea, Task Force Chair IESBA Meeting June 29-30/1 July, 2015 New York, USA
2
Page 2 | Proprietary and Copyrighted Information ED proposalRespondents support? Board’s tentative view at April 2015 meeting 7-yr time-on for all KAPsMost supportedNo change 5-yr cooling-off for EPMajority did not support Continued support but consider recognizing jurisdiction rules 2-yr cooling-off for other KAPs (inc EQCR) Most supportedNo change but consider PIOB Observer’s remarks 5 yrs off applies all PIEsMost supportedNo change 5 yrs off if only 1 yr EPGeneral disagreementSupport for new proposal>4 yrs or 2 of last 3 as EP: 5yrs off Recap – Rotation of KAPs on the Audit of PIEs Long Association
3
Page 3 | Proprietary and Copyrighted Information ED proposalRespondents support?Board’s tentative view at April 2015 meeting Additional KAP restrictionsEvenly balancedContinued Support Limited Consultation former EP On balance supportedContinued Support Concurrence with TCWGGeneral supportContinued Support Enhancements to GPMost supportedContinued Support EP becoming EQCRNew issue – not in EDTF liaising with IAASB WG Recap – Rotation of KAPs on the Audit of PIEs Long Association
4
Page 4 | Proprietary and Copyrighted Information IFAC SMPC –Support alternative approach to allow local compliance –Supports application to just listed entities or even reconsideration of 7/3 –Concern about SMPs in jurisdictions where there a many PIEs and regarding the proposed restrictions Letter from FEE considered later Recent Feedback from Stakeholders Long Association
5
Page 5 | Proprietary and Copyrighted Information National Standard Setters –Some concern about extension of EP cooling-off from 2 yrs to 5 –Impact on SMPs / market competition / lack of empirical evidence –Suggested alternative minimum cooling-off period of three years –Others highlighted the “fresh look”, importance to investors –Possibility of flexibility with concurrence of TCWG Recent Feedback from Stakeholders (continued) Long Association
6
Page 6 | Proprietary and Copyrighted Information Further consideration of the issues arising from the ED discussed by the Board in April 2015 EQCR
7
Page 7 | Proprietary and Copyrighted Information ED proposed that the cooling-off period for KAPs (inc EQCR) other than the EP remain at 2 years Most respondents supported Some respondents did not support indicating the same cooling- off period should apply to the EQCR as the EP Majority of CAG Representatives supported the EP and EQCR having the same 5-year cooling-off period SMPC and EU CAG Representatives did not support Length of Cooling-Off Period for EQCR Long Association
8
Page 8 | Proprietary and Copyrighted Information Further consideration of: –Regulatory stakeholder comments –PIOB Observer comments on familiarity of EQCR –Finding the right balance in public interest –Analysis of difference between EQCR and EP role (Appendix) –Benefits and detriments to audit quality Presenting another option for the Board’s consideration Length of Cooling-Off Period for EQCR Long Association
9
Page 9 | Proprietary and Copyrighted Information OptionListed PIENon-Listed PIE EP7/5 EQCR7/57/2 Other KAP7/2 Length of Cooling-Off Period for EQCR – Option Long Association
10
Page 10 | Proprietary and Copyrighted Information Addresses regulatory concerns about EQCR having same cooling-off period as EP, at least in respect of listed entities Consistent with ISQC 1 which requires an EQCR on audits of listed entities Consistent with CAG suggestion about splitting requirements between listed and unlisted Addresses some of SMPC concerns Length of Cooling-Off Period for EQCR – How it Addresses Stakeholder Feedback Long Association
11
Page 11 | Proprietary and Copyrighted Information Retains current requirements for KAPs other than EP for audits of non-listed PIEs Increases complexity of application for jurisdictions that do not currently mandate 5-yr cooling off for EQCRs Length of Cooling-Off Period for EQCR – Other comments Long Association
12
Page 12 | Proprietary and Copyrighted Information Further consideration of the issues arising from the ED discussed by the Board in April 2015 Recognizing Jurisdictional Provisions
13
Page 13 | Proprietary and Copyrighted Information ED proposed increase in cooling-off period for EP to 5 years Many agreed 2 years is too short but majority did not support increase to 5 years Majority of Board supported proposal but asked TF to consider jurisdictional alternative Board did not support TF’s initial proposal allowing exemption –Where time-on period for a KAP serving on a PIE is shorter than 7yrs –Where mandatory firm rotation is required in addition to rotation of KAPs Length of Cooling-Off Period for EP Long Association
14
Page 14 | Proprietary and Copyrighted Information Took into account views of –Board members –IESBA CAG –NSS –IFAC SMPC Letter from FEE asking for –Holistic approach –IESBA should not undermine robust jurisdictional alternatives Task Force Consideration of Alternative Provisions Long Association
15
Page 15 | Proprietary and Copyrighted Information Many different approaches to partner rotation –Needs of different jurisdictions and their development over time ED respondents concerned over interaction with local requirements Unintended consequences making requirements –Stricter than Code in local jurisdictions –Too complicated to interpret and apply Task Force Consideration of Alternative Provisions (Continued) Long Association
16
Page 16 | Proprietary and Copyrighted Information Length of Cooling-Off Period for EP – Revised Proposal Long Association No longer open-ended Not trying to deal with “equivalence” Recognizes different combinations of requirements Limited specific alternative to 5-yr cooling-off period for EP, while still setting a minimum baseline of 3 years All other long association requirements continue to apply to all PIE audits
17
Page 17 | Proprietary and Copyrighted Information Length of Cooling-Off Period for EP – Revised Proposal Long Association One specific alternative if jurisdictional or legislative body following due process/based on local circumstances determines –EP serves a time on period shorter than 7-years or –Has implemented mandatory firm rotation in addition to KAP rotation –Requirements must be in law or regulation If the above apply, EP can cool-off for a minimum of 3 years –Specific and limited alternative – not an exception
18
Page 18 | Proprietary and Copyrighted Information Liaison with IAASB continues regarding: –Adjustment to ISQC 1 to address issue of KAP moving directly from EP role –The Role of Professional Skepticism Corresponding adjustments to Section 291 prepared but not presented Other Matters Long Association
19
The Ethics Board www.ethicsboard.org
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.