.png?sfvrsn=dd675fd5_2)
.jpg?sfvrsn=d4038e84_0)
-(1).png?sfvrsn=db949de5_0)
-(5).png?sfvrsn=3162fbc9_0)
/business-management-global-connection/istock-1167579720-c.jpg?sfvrsn=ff93f9a5_2)
/audit-assurance/istock-1169206203-c.jpg?sfvrsn=1d6f9b25_2)
/professionals/istock-845530100-c.jpg?sfvrsn=46efdedd_2)
/ethics-and-professionalism/istock-1141115724-c.jpg?sfvrsn=4e54d691_2)
/business-management-global-connection/istock-1079974636-c.jpg?sfvrsn=e9fea23b_2)
.png?sfvrsn=905ee1bd_0)
/legal-secretarial/istock-866706340-c.jpg?sfvrsn=d7f57b8c_2)
Changes to the Provisions on Long Association of Key Audit Partners
ISCA last revised EP 100 in August 2018 to reflect the changes to the provisions on long association of key audit partners with an audit or assurance based on the pronouncement issued by the International Ethics Standards Board for Accountants.
The changes took effect for audits of financial statements for periods beginning on or after 15 December 2018 and for other assurance engagements on 15 December 2018.
Please click here for the changes.
ACRA also issued changes to the Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) relating to long association of personnel with an audit or assurance client.
Please click here for the changes.
Rotation Requirements for Engagement Partners of Public Interest Entity Audit Clients
As part of the changes, the cooling-off period for engagement partners (EPs) of public interest entity (PIE) audit clients is increased from 2 years to 5 years while the time-on period remains unchanged at 7 years.
A transitional provision is also included as part of the changes to facilitate the transition to the cooling-off period of 5 consecutive years for EPs.
Paragraph 290.163 in EP 100 states that, where the legislative body or regulator (or organisation authorised or recognised by such legislative body or regulator) has established a cooling-off period of less than 5 consecutive years, the higher of that period or 3 years may be substituted for the cooling-off period of 5 consecutive years specified in paragraphs 290.155, 290.158 and 290.160(a) provided that the applicable time-on period does not exceed 7 years.
The transitional provision allows 3 years of cooling-off period for EPs of PIE audit clients for audit of financial statements for period beginning prior to 15 December 2023. Accordingly, under the transitional provision, the time-on and cooling off periods for EPs of PIE audit clients are 7 years and 3 years respectively.
Rotation Requirements for Engagement Partners on Audits of SGX Listed Companies
For audits of SGX listed companies, EPs are also required to comply with the Singapore Exchange Securities Trading Limited (SGX-ST) Listing Manual. The time-on and cooling-off periods in SGX-ST Listing Manual are 5 years and 2 years respectively.
Until and unless SGX amends the listing rules, EPs on audits of companies listed on SGX are to comply with the stricter of the rotation requirements prescribed in the ACRA Code and the SGX-ST Listing Manual as appended below.
|
Role |
ACRA Code |
SGX-ST Listing Manual (time-on/cooling-off) |
Stricter of the requirements |
||
|
With transitional provision (time-on/cooling-off) |
Without transitional provision (time-on/cooling-off) |
With transitional provision (time-on/cooling-off) |
Without transitional provision (time-on/cooling-off) |
||
|
EP |
7/3 |
7/5 |
5/2 |
5/3 |
5/5 |
Table 1: Stricter of the Rotation Requirements prescribed in the ACRA Code and the SGX-ST Listing Manual
- The time-on period for EPs on audits of companies listed on SGX will be 5 years;
- With the transitional provision, the cooling-off period for EPs will be 3 years for the audits of financial statements for periods beginning prior to 15 December 2023. For the audits of financial statements for periods beginning on or after 15 December 2023, the transitional provision is no longer applicable, and the cooling-off period will be 5 years.
Click here for the different scenarios that illustrate how the changes to the rotation requirements would result in a change in the cooling-off periods for the EPs on audits of companies listed on SGX.