Document ID: chunk:federal_register_of_legislation:F2025L00108:body:0:p7
Version: federal_register_of_legislation:F2025L00108
Segment Type: other
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Character Range: 18058–21275

of the engagement or the entity. Various provisions of relevant ethical requirements may apply only to individual members or practitioners, such as an engagement quality reviewer, and not the firm itself.

 1.                Paragraph A13 of ASQM 2 is amended to read as follows:

Relevant ethical requirements may include specific independence requirements that would apply to individual members or practitioners, such as an engagement quality reviewer. Relevant ethical requirements may also include provisions that address threats to independence created by long association with an audit or assurance client. The application of any such provisions dealing with long association is distinct from, but may need to be taken into consideration in applying, the required cooling-off period in accordance with paragraph 19.

 1.                Paragraph A15 of ASQM 2 is amended to read as follows:

Relevant ethical requirements may include requirements and guidance to identify, evaluate and address threats to objectivity. For example, the APESB Code provides specific guidance, including examples of:

         * Circumstances where threats to objectivity may be created when a member or practitioner is appointed as an engagement quality reviewer;

         * Factors that are relevant in evaluating the level of such threats; and

         * Actions, including safeguards, that might address such threats.

 1.                Paragraph A26 of ASQM 2 is amended to read as follows and footnotes 11 and 12 are inserted:

ASAE 300010  and ASSA 5000[11] also establishes requirements for the engagement partner and engagement leader, respectively, in relation to the engagement quality review.[12]

 1.                As a result of the footnotes insertion above, subsequent footnotes of ASQM 1 are re-numbered and references to these footnotes are updated accordingly.

Amendments to ASA 720

 1.                The following is added to the end of paragraph A3 of ASA 720:

           * Sustainability reports or other sustainability-related information.

 1.                Paragraph A5 of ASA 720 is amended to read as follows:

An annual report is different in nature, purpose and content from other reports, such as a report prepared to meet the information needs of a specific stakeholder group or a report prepared to comply with a specific regulatory reporting objective (even when such a report is required to be publicly available). Examples of reports that, when issued as standalone documents, are not typically part of the combination of documents that comprise an annual report (subject to law, regulation or custom), and that, therefore, are not other information within the scope of this Auditing Standard, include:

                  Sseparate industry or regulatory reports (for example, capital adequacy reports), such as may be prepared in the banking, insurance, and superannuation industries, or special purpose reports addressing certain kinds of sustainability information.

                  Corporate social responsibility reports.

                  Sustainability reports.

                  Diversity and equal opportunity reports.

                  Product responsibility reports.