Auditor rotation - Frequently asked questions

The NZAuASB has issued an exposure draft proposing to adopt the revised long association requirements issued by the International Ethics Board for Accountants (IESBA).  

The changes impact all assurance engagements, but have the most significant impact for the rotation rules for auditors of public interest entities (PIEs).

We considered it important to issue the FAQs now, even though the revised provisions are still out for consultation in New Zealand and the NZAuASB has not yet deliberated on the comments received (submissions closed this week on 31 July).  

question icon Read the FAQs 

The proposed new provisions become effective for audits of financial statements for periods beginning on or after December 15, 2018. 

There is retrospective application of the new requirements for engagement partners who have not completed the current mandatory two-year cooling off period under the current rules before the proposed new rules become effective. 

The FAQs fully explore the transition to the new provisions. 

The table illustrates when the old rules and when the new rules would apply:

 Old rules applyNew rules apply
EP rotated off
31 Dec 2016
May come back after 2 years
(i.e. Dec 2019)
EP rotated off
30 Sept 2017
May come back after 2 years
(i.e. Sept 2020)
EP Rotated off
31 Dec 2017
  May only come back after 5 years 
(i.e. For Dec 2023)
EP Rotated off
31 Dec 2018
  May come back after 5 years
(i.e. For Dec 2024)


These examples assume that the engagement partner for the audit of a public interest entity served for seven cumulative years in that role.  This table is indicative only, and may need to be adapted according to the specific circumstances.  Please refer to the exposure draft to determine when the proposed revised requirements will apply to specific circumstances.