Audit partner rotation to be cut to five years
Plans to cut the number of years an auditor can act as engagement partner for a client could be approved this week in the wake of government pressure.
Following the government’s interim report on auditing and accounting issues, the ICAEW has proposed that the recommended seven year period for audit partner rotation be cut to five years.
The proposal will be debated at a council meeting of the ICAEW this Wednesday, and will mark a change in policy for the institute – previously it had endorsed the EU’s recommendation that auditors should be switched once every seven years.
The move will be seen as an attempt to address perception issues at a time when auditors’ independence is coming under close scrutiny.