Document ID: chunk:federal_register_of_legislation:F2020L00885:body:0:p6
Version: federal_register_of_legislation:F2020L00885
Segment Type: other
Provision Reference: 
Character Range: 15661–18831

entity and its operations;

         * The entity's senior management; or

         * The underlying subject matter and subject matter information of the assurance engagement.

by using the same senior personnel on an assurance engagement over a long period of time.

15.               Paragraph Aus A13.1 is amended as follows:

Relevant ethical requirements include examples of factors that are relevant to evaluating the level of a threat that may arise when an individual is involved in an assurance engagement over a long period of time. Relevant ethical requirements also provide examples of actions to address threats, including:

         * Eliminating the threat by rotating the individual off the engagement team; or

         * Applying safeguards to reduce the threat to an acceptable level, for example by performing regular independent internal or external quality reviews of the engagement.

Determining appropriate criteria to address familiarity threats may include matters such as:

         * The nature of the engagement, including the extent to which it involves a matter of public interest; and

         * The length of service of the senior personnel on the engagement.

Examples of safeguards that might be appropriate to address familiarity threats include rotating the senior personnel or requiring an engagement quality control review.

16.               Paragraph Aus A14.1 is amended as follows:

Relevant ethical requirements and the Corporations Act 2001 require the rotation of the engagement partner, the engagement quality control reviewer, and other key audit partners in respect of certain engagements. A familiarity threat is particularly relevant in the context of financial report audits of listed entities. For these audits, relevant ethical requirements and the Corporations Act 2001 specify partner rotation requirements.

17.               Footnote 5, referenced to paragraph A56, is amended as follows:

       5.        See for example, paragraphs R114.1, 114.1 A1 and R360.26 Section 140.7 and Section 225.35 of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

Amendments to ASA 100

18.               The content of paragraph 39 and related footnotes 6 and 7 are deleted.  Paragraph 39 is replaced by the following:

The auditor is subject to relevant ethical requirements, including those pertaining to independence, relating to audit engagements as defined in ASA 102.

Amendments to ASA 200

19.               Paragraph A19 is amended as follows:

... These include remaining alert, through observation and making enquiries as necessary, for evidence of breaches of non-compliance with relevant ethical requirements by members of the engagement team, determining the appropriate action if matters come to the engagement partner's attention that indicate that members of the engagement team have breached not complied with relevant ethical requirements, ...

Amendments to ASA 220

20.               Paragraph 9 is amended as follows:

Throughout the audit engagement, the engagement partner shall remain alert, through observation and making enquiries as necessary, for evidence