Mandatory rotation of auditors essay

Auditors must be free to approach a piece of work in whatever manner they consider best. In addition, the auditing profession is a dynamic one, with new techniques constantly being developed and upgraded which the auditor may decide to use. Basically, auditors must have unlimited access to all company information. The collection of audit evidence is an essential process, and cannot be restricted in any way by the client company.

Mandatory rotation of auditors essay

Majority of studies conclude that the detrimental effects of firm rotation on the quality of the audit work by far outweigh its positive effects as a safeguard against various independence and quality threats. Frequent changes of audit firms, whether resulting from mandatory rotation or otherwise, introduce threats to independence and operational difficulties that make audit failure more likely.

There are differing opinions, as some audit firms wish to preserve the client bases, while others welcome more market volatility. Mandatory firm rotation has been concluded as an unnecessary step at present, whose main impact will be the auditing profession and its ability to attract talent for the future.

Resolve a DOI Name

At a time when the restoration of public trust in financial reporting is a key priority, such changes should be avoided.

Background Following the failure of HIH Insurance and other listed Australian companies during the first half ofconcerns were raised about the adequacy of Australian rules governing audit independence. Independence is defined to require " The existing regulation prior of the auditing profession was predominantly the responsibility of the professional accounting bodies.

Whereby the legislative requirements were "minimal" and "piecemeal. As a part of the growing recognition of the desirability of achieving global uniformity and harmonisation in all areas of financial reporting and auditing, many studies and discussions including the Ramsay report were instigated since This is to be achieved through adding value to financial statements by improving reliability, which in turn should assist to lower the cost of capital by reducing information risk and enhancing value to capital market by strengthening the credibility of financial statements.

Mandatory rotation of auditors essay

The key threats identified are over-familiarity, self-interest, advocacy and intimidation of auditors.Download-Theses Mercredi 10 juin The essay will divided into three parts, firstly, it will describe the mandatory rotation of audit firms; secondly, it will analyses the argument for and against this issue; finally, it will come to a conclusion.

The dynamics over the years between the homeowners and the FCC to can be summed up as follows: The Fountains of Palm Beach was a homeowner centric community prior to , and it was the residents (not the FCC members) who were the focal point, with .

January Issue No.

Reprints ›

Inside this month’s issue . OUR STORY OF THE MONTH: Pinnacle of Bull-Headed Stupidity: Plopping a 5,Cow CAFO on Low-Lying Acres. Mandatory Rotation of Auditors Mandatory Audit Firm Rotation – a Literature Review Essay Words | 6 Pages. Mandatory Audit Firm Rotation – A Literature Review Introduction Since the passing of the Sarbanes-Oxley Act of , much debate has occurred concerning mandatory auditor rotation for publicly held companies.

Mandatory rotation of auditors essay

Most corporate. As new auditor rotation mandates are debated and adopted or rejected worldwide, a new research study takes a different approach to assessing the effects of these mandates on audit quality. So far, the debate over mandatory auditor rotation has been framed as two competing arguments.

On one hand.

Resolve a DOI Name