Long Association Post-Implementation Review (LAPIR) – Phase 1
The Long Association Post-Implementation Review (LAPIR) is to be carried out in two phases:
This phase will review the implementation status of the five-year cooling-off requirement for EPs on audits of PIEs, and any issues arising from the implementation of such requirement before the expiry of the transition period for the jurisdictional provision.
Due to commence in Q2 2023, this phase will review how effectively the other revised long association provisions in the Code are being implemented in practice, taking into account legislative or regulatory developments relating to other regimes around the world intended to address long association, such as mandatory firm rotation (MFR) and mandatory retendering (MRT). To achieve synergies, the LAPIR Phase 2 will be undertaken in conjunction with the post-implementation review of the restructured Code.
- Richard Fleck, Chair, ex-IESBA Deputy Chair
- Saadiya Adam, IESBA Member
- Sung-Nam Kim, IESBA Member
- Kristen Wydell, IESBA Technical Advisor
IESBA November-December 2021 Meeting Highlights
The IESBA received the final report of the LAPIR Working Group on Phase 1 of the Long Association Post-Implementation Review (LAPIR). The final report summarizes the key comments and suggestions raised by respondents to the IESBA’s LAPIR Questionnaire.
The IESBA agreed with the Working Group’s recommendation that no action be taken to extend or otherwise vary the “jurisdictional provision.” The jurisdictional provision allows jurisdictions to implement a cooling-off period for engagement partners on audits of financial statements of PIEs shorter than the five years required by the IIS, subject to a minimum of three years, provided certain conditions are met. The jurisdictional provision will expire for audits of financial statements for periods beginning on or after December 15, 2023, in accordance with the Long Association Close-Off Document.
The IESBA will formally communicate its decision in January 2022. In accordance with the IESBA’s Strategy & Work Plan 2019-2023, Phase 2 of LAPIR is expected to commence in Q2 2023.