Audit quality is seriously threatened by the current five-year mandatory
rotation for audit engagement partners,
The institute said the rotation was a threat to audit quality in the listed
company sector, in response to the Financial Reporting Council’s discussion
paper Promoting Audit Quality.
‘Concerns have been expressed in recent months that the existing rotation
requirements in the UK may inadvertently have a negative impact on audit quality
– particularly in specialised sectors – because key audit partners are removed
without always having someone of sufficient experience of the industry to
replace them,’ said James Barbour,
director of accounting and auditing at ICAS.
The institute also warned that auditors were required to undertake too much
box-ticking, which removed judgment from their role in assessing the overall
financial position of the business.
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