On 14 August 2018, the Institute of Singapore Chartered Accountants (ISCA) has made amendments to Ethics Pronouncement (EP 100) August 2018, Code of Professional Conduct and Ethics, provisions on long association of senior personnel with an audit or assurance client to deal with familiarity and self-interest threats created when the same senior personnel on the same client engagement over a long period of time.
Subject to the transitional paragraph 290.163, Section 290.148 to 290.168 are expected to be effective for audit of financial statements for periods beginning on or after 15 December 2018.
Section 291 paragraphs 291.137 to 291.141 are expected to be effective on 15 December 2015.
The transitional paragraph 290.163 shall have effect only for audits of financial statements for periods beginning prior to 15 December 2023.
The following are key amendments to the Long Association provisions:
- An increase in the cooling-off period for Engagement Partners of public interest entity audit clients from 2 years to 5 years
- An increase in the cooling-off period for Engagement Quality Control Review Partners of public interest entity audit clients from 2 years to 3 years
- Additional restrictions placed on a former key audit partner, during the cooling-off period, prohibiting him/ her from leading or coordinating the firm’s professional services to the audit client or overseeing the firm’s relationship with the audit client; and
- The former key audit partner is also prohibited during the cooling-off period, from undertaking any other role, including provision of non-assurance services, that would result in frequent interaction with senior management or those charged with governance.
More information, including the amended EP, can be viewed from ISCA’s website.
Source: ISCA, 17 August 2018