Neil Lerner, head of risk management at KPMG, told Accountancy Age: ‘I don’t think they (the government) will propose rotation. There is no evidence that it improves quality or independence.
‘We should look at it again in three years time when no doubt the position will look very different indeed.’
Senior partners of the world’s largest firms want the government to allow the new stricter rules to bed down instead of bringing in the ‘straight jacket’ of auditor rotation.
The latest research from Italy – the only industrialised country to have long-term experience of auditor rotation – showed the practice had done nothing to improve audit quality.
Rodger Hughes, managing partner of markets at PricewaterhouseCoopers, said: ‘The response of the governments in the UK and US is more to do with pressure groups and media than the assessment of history. I hope they will realise it’s not worth pursuing.’
Both agreed that if rotation were brought into the UK the ultimate goal could easily be defeated by staff moving freely between the firms so the audit client could retain the expertise and knowledge.
The average cost of fraud increased 35.4% to £3.9m in 2016, compared to 2015 data
Harrison Beale & Owen will (HB&O) have a new chairman and managing director at the helm for 2017
Satvir Bungar promoted to managing director in the mergers and acquisitions team
Carolyn Brown appointed as the first head of client legal services practice RSM Legal