The audit mandatory rotation rule: the state of the art

Angela Kate Pettinicchio, MARA CAMERAN, GIULIA NEGRI

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

Mandatory audit rotation imposes periodical breaks to audit engagements and is intended to avoid excessively long relationships between the auditor and the client. The E.U. has finally introduced mandatory rotation for the audit firm in addition to the already existing audit partner rotation rules. The U.S., however, has for now decided to retain the partner rotation rule without introducing mandatory audit firm rotations. After an overview of the experience of a number of countries, we summarize the pros and cons of a compulsory change in the audit firm. Moreover, we focus on the empirical evidence collected on the benefits and costs of the rule. So far, investigations into the impact of the rule at corporate and market level have not been able to prove that the benefits outweigh the costs.
Lingua originaleEnglish
pagine (da-a)61-75
Numero di pagine15
RivistaJOURNAL OF FINANCIAL PERSPECTIVES
Volume3
Stato di pubblicazionePubblicato - 2015

Keywords

  • AUDIT MARKETS
  • AUDITOR ROTATION
  • REGULATION

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