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Does the rotation of auditors improve the quality of auditing? - Essay Example
Finance & Accounting
Pages 8 (2008 words)
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…
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. ...
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