• 1 Marks

AAA – L3 – SA – Q1.3 – IESBA Code

Correct statement about IESBA Code.

Which of the following statements is correct with regards to the IESBA Code?

A   A key audit partner of a listed company shall be rotated after seven years serving as the key audit partner.

B   non-audit work from a client must not exceed in amount 100% of the income obtained from audit work for the client.

C   Accountancy work shall not be carried out for an unlisted company client.

D   Overdue fees from a client are permissible provided that this arrangement has been agreed between the audit firm and the client.

A

Explanation:
The IESBA Code requires that a key audit partner for a listed company be rotated after seven years to maintain independence, making option A correct. Option B is incorrect, as the IESBA Code does not specify a strict 100% limit on non-audit fees but requires safeguards to ensure independence. Option C is incorrect, as accountancy work can be performed for unlisted clients, subject to ethical safeguards. Option D is incorrect, as overdue fees can impair independence unless resolved, regardless of agreements. Thus, A is the correct answer.

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