Point of view: Mandatory audit firm rotation: Why other changes would be better for investors

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Point of view 05/24/2012 by Assurance services

Highlights

  • Mandatory audit firm rotation has been examined in the U.S. before—but it has never been adopted.
  • Changes to auditors' responsibilities should focus on improving the overall quality of the audit and the quality of financial reporting for investors. Mandatory audit firm rotation does not achieve these objectives.
  • Mandatory audit firm rotation would diminish audit quality, make financial reporting less reliable, and add costs for investors.
  • We believe the reforms implemented resulting from the Sarbanes-Oxley Act have been successful in enhancing audit quality and should be built upon.