Cost is cited as the greatest obstacle to introducing a policy to rotate audit firms every five years or so.
Ted Awty, head of audit at KPMG, said: ‘Introducing new auditors is costly to the client, as the team builds detailed knowledge of the client, its business and the key issues in its financial statements. The accumulated cumulative knowledge and experience of long-term complex issues exactly where the auditor’s expertise is needed most is lost on rotation.’
Peter Williams, on the other hand, has argued that rotation is the least of the profession’s concerns in the current climate.
‘It is tempting to urge auditors to welcome the idea of a thoroughly independent inquiry to see if such a move will deal with many of the perceived problems of independence,’ said Williams.
However Williams pointed out that perhaps rotation will end up suiting the Big Five, which carry out all of the FTSE-100 audits.
‘The fierce rivalry that exists between firms at the moment could well subside, surely not a welcome side effect to those who criticise the big firms,’ added Williams.
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season