PracticeAuditAudit rotation threatens quality

Audit rotation threatens quality

Forced rotation of audit firms inadvertently damages audit quality, the latest research concludes.

Link: Review Board dismisses mandatory audit rotation

An in-depth study by the Brussels-based European accountancy body, FEE, which looked at reports on the topic by governments, regulators and academics from around the world, concluded that mandatory rotation ‘could undermine the EU’s work to build public trust in financial reporting’.

The research also found that mandatory rotation would lead to increased costs to business and time dedicated to oversee the process. Although FEE said cost should not be a decisive argument in decision making.

Proposals to introduce audit firm rotation were pushed up the agenda following the spate of corporate collapses in the US.

Following research the US concluded that rotation was not the solution in fighting high level fraud and corruption. Italy is the only EU country that applies mandatory rotation of audit firms.

Related Articles

Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

Audit Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

7d Alia Shoaib, Reporter
PwC pay gap review finds “no evidence of gender bias” at BBC

Audit PwC pay gap review finds “no evidence of gender bias” at BBC

2w Alia Shoaib, Reporter
Shareholders bring lawsuit against Steinhoff and Deloitte

Audit Shareholders bring lawsuit against Steinhoff and Deloitte

3w Alia Shoaib, Reporter
Carillion collapse: FRC to investigate KPMG over audit work

Audit Carillion collapse: FRC to investigate KPMG over audit work

3w Alia Shoaib, Reporter
Former KPMG partners charged over PCAOB data leaks

Audit Former KPMG partners charged over PCAOB data leaks

4w Alia Shoaib, Reporter
PwC’s slapped with 2 year audit ban in India

Audit PwC’s slapped with 2 year audit ban in India

4w Alia Shoaib, Reporter
PwC found negligent by US judge over Colonial Bank's $2bn fraud

Audit PwC found negligent by US judge over Colonial Bank's $2bn fraud

2m Alia Shoaib, Reporter
Deloitte South Africa investigated over Steinhoff audits

Audit Deloitte South Africa investigated over Steinhoff audits

2m Alia Shoaib, Reporter