1. Long Association Task Force
Marisa Orbea, Task Force Chair
IESBA Meeting
December 4-6, 2013
New York, USA

2. Summary of September Board meeting
Long Association
Background
Summary of September Board meeting
Continue to monitor regulatory developments
Strengthen overall framework of
Further consider:
Communication with TCWG
Role of non-KAPs that can influence the audit
Time served prior to becoming a KAP
Length of cooling-off period
Permissible activities during cooling-off

3. Summary of September Board meeting (continued)
Long Association
Background
Summary of September Board meeting (continued)
No modification to the exception provisions
No extension of mandatory rotation to non-PIEs

4. October 2013 CAG Teleconference
Long Association
October 2013 CAG Teleconference
Main views expressed:
Support for principles based Code
Consider all individuals who can influence the audit not just partners
TCWG should not have a decision making role however consider improving communication
Mandatory rotation should not extend to non-PIEs
Increase cooling-off period
Limit interaction with client during cooling-off
Mixed feedback on exception provisions

5. Improvements to Overall Framework
Long Association
Improvements to Overall Framework
Suggested amendments:
Recognize familiarity can add to audit quality
Additional guidance on self-interest and familiarity threats
Factors to be considered – individual and client
Factors in combination can both increase and reduce threats
Additional safeguards
Rotation as a safeguard for all audits and its application (at least one year off)

6. Communication with TCWG
Long Association
Communication with TCWG
Already guidance on communications between auditor and TCWG in
Improving communication not specific to long association
Considered role of TCWG with respect to exception provisions:
Amend to require communication with TCWG

7. Time served prior to becoming a KAP (PIEs)
Long Association
Time served prior to becoming a KAP (PIEs)
Should time served count towards total length of service
Imposing an overall time limit would be arbitrary
Recommend including guidance that application of principles could mean total service as KAP is less than seven years
Also need to consider long association of non-KAPs

8. Cooling-Off Period (PIEs)
Long Association
Cooling-Off Period (PIEs)
Recommend a 3 year cooling-off period (time on remains at 7 years)
Away for at least two full audit cycles
Applicable to all KAPs not just lead and review partners
To be considered in conjunction with restrictions on permissible activities during the cooling-off period

9. Permissible Activities During Cooling Off Period
Long Association
Permissible Activities During Cooling Off Period
Minimal contact with audit client during cooling-off
Cannot continue on the audit or directly influence the audit
“audit team” definition minus “chain of command”
however can answer questions on prior year audit
Cannot provide non-audit services
“ad hoc” or “one off” too imprecise
Can provide generic services involving technical expertise
Cannot be the “relationship partner” for the client
Can have social contact