What is a condition under which the rotation period for a partner on a listed client can be extended?

The correct response highlights an important aspect of regulatory compliance and corporate governance practices. The rotation period for an audit partner on a listed client can indeed be extended when there is a change in the board of directors at the client and this extension receives explicit approval from the audit committee. This measure is significant because it helps to maintain the effectiveness and integrity of the audit process, ensuring that the audit partner is still seen as independent and capable of performing their duties adequately after significant changes in the client's leadership.

The involvement of the audit committee in this decision reflects their role in overseeing the conduct of the audit and ensuring that it is performed in accordance with relevant regulations and professional standards. This committee's approval is crucial because it establishes a level of oversight that promotes transparency and accountability within the organization.

In contrast, the other options do not align with the regulatory requirements for extending a rotation period. Changes in financial stability, client requests, or a partner's desire for continuity do not inherently provide justifiable grounds for extending the rotation period, as they do not emphasize the importance of independence and are not recognized by governing bodies as valid reasons for not adhering to the mandated rotation period.