Does the rotation of auditors improve the quality of auditing? - Essay Example

Only on StudentShare

Extract of sample
Does the rotation of auditors improve the quality of auditing?

Auditing had never been influential and applicable as it is today. Each corporation feels the need to examine its accounts from time to time, and especially when change is about to occur, so that it can determine their correctness and fairness, as well as detect of any irregularity. Auditing is broad and can be conducted for systems, data, and finances which are of great concern in this context. Auditing can be described as an examination and verification of accounting data with an aim of establish the correctness and reliability of the accounting reports and statements (Shirin, 2009). However, numerous controversies exist over establishing a standard against which actual audit performances can be measured. Therefore, organizations may have difficulties in assessing the effectiveness and quality of their audit, even if it serves the purpose. Audit quality has been described by Fearnley et al as the “market assessed joint probability that a given auditor will both discover a breach in the client’s accounting system and report the breach” (2011, p. 2007). Organization’s committees and shareholders need enhanced audit quality for the sake of delivering appropriate organization audit results and opinions. Firm rotation of auditors has been campaigned for and applied in some countries as a way of improving audit quality. ...Show more

Summary

DOES THE ROTATION OF AUDITORS IMPROVE THE QUALITY OF AUDITING? By Author’s Name Name of the Class Name of the Professor Name of the School City, State 10 December 2013 What is audit quality? Globalization has enabled financial and economic growth of corporations within economies and across borders…
Author : rwalsh
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Does the rotation of auditors improve the quality of auditing?"
with a personal 20% discount.
Grab the best paper

Related Essays

Advance corporate finance
Advance Corporate Finance Table of Content Introduction 3 Organizational Structure 3 Corporate Governance 5 Previous Merger and Acquisition of Crown Limited 7 Reference 8 Introduction This paper represents organizational structure and corporate governance of Crown Limited, a famous international entertainment company and one of the largest entertainment groups in Australia.
3 pages (750 words) Essay
Does the rotation of auditors improve the quality of auditing?
Whitehouse suggested that this is only achievable through quality audit (par. 3). However, according to the U.K. Competition Commission, most audit firms and public companies in the country are too interdependent, thus compromising the objectivity and skepticism that is intended to safeguard interests of shareholders.
7 pages (1750 words) Essay
Does the rotation of auditors improve the quality of auditing?
Further, it is expected that the mandatory auditor rotation will result in higher audit quality, results in auditor’s independence, a downturn in audit costs and to lessen big audit firms market concentration. It is to be noted, in the recent past, Italy, India and Brazil have made the auditor rotation as mandatory whereas Canada and Spain have revoked their earlier decision, whether to make auditor rotation as mandatory.
8 pages (2000 words) Essay
Auditing
It is also used by the investors in their decision making process, related to purchase or sell of the securities. The auditors guide the investors and owners in their decision making process. The effective utilization of financial statements requires understanding of the functions of auditors as well.
7 pages (1750 words) Essay
Does the rotation of auditors improve the quality of auditing?
There are those that argue that long-term relationships (auditor tenure) build more knowledge about the firm and its accounting procedures which, in turn, translates into more effective auditing practice and skills. Other stakeholders in the business world believe that audit quality is reduced when rotating auditors due to the lack of familiarity about business processes and accounting, thus impacting the ability of auditors to do a thorough job in assessing best practice within the organisation.
8 pages (2000 words) Essay
Does the rotation of auditors improve the quality of auditing?
In this context, the Sarbanes-Oxley act was implemented in the US that aimed at bringing back public faith in financial reports. The Sarbanes-Oxley Act made it mandatory for the auditor to be replaced after every five years in the US. The European Commission, however, did not mandate a compulsory auditor rotation, and recommended in its proposal implementation of audit firm rotation and change of audit firms every six to nine years (European Commission, 2010).2 Globally, mixed approaches have been adopted as regard MAR, and in many countries such as the UK, audit partner rotation is given preference over firm rotation, while the regulators in Germany, the US and the UK have derived that pote
7 pages (1750 words) Essay
Does the rotation of auditors improve the quality of auditing?
In general, auditing is fundamentally described as the systematic evaluation and the authentication of financial along with accounting records of a specific business organisation (Rathore, 2008; University of Mumbai, n.d.). It can thus be affirmed from a broader perspective that the auditing ensures the financial reports and the business finances of a specific organisation are appropriately reported and most vitally, effectively utilised (BMQR.org, 2011; Kumara & Sharma, 2011).
8 pages (2000 words) Essay
Does the rotation of auditors improve the quality of auditing?
This provision principally attempts towards ensuring that auditors are provided with better independence in their auditing operations as well as towards assuring that investors are offered with better confidence on the financial reports published following the auditing process.
8 pages (2000 words) Essay
Coursework 2: Financial service (Home Retail Group)
The paper further seeks to discuss how mangers, directors and other managerial leaders use balance scorecards to align business activities to the identified vision and strategy, and to monitor
11 pages (2750 words) Coursework
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT