Does the rotation of auditors improve the quality of auditing?

Does the rotation of auditors improve the quality of auditing? Essay example
Finance & Accounting
Pages 8 (2008 words)
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Does the Rotation of Auditors Improve the Quality of Auditing? Table of Contents Introduction 3 Discussion 4 Defining Audit Quality 4 The Issue that are Addressed by ‘Rotation of Auditors’ 4 Meaning of ‘Rotation of Auditors’ 5 Advantages of ‘Rotation of Auditors’ 6 Recommendations 11 Conclusion 11 References 12 Introduction Rotation of auditors implies to the regulatory decision that audit firms will be limited on the basis of years for which they will perform audit operations for a particular entity in the corporate sector.


Rotation of auditors has also been argued to facilitate business organisations in developing better transparency in their financial reports. Moreover, auditor rotation is identified as a process assisting in better flow of information. Rotation also ascertains that the financial statements of a business organisation are reviewed frequently. In this manner, auditor rotation develops an increased accountability along with independence amid auditors. However, the policy of auditor rotation is identified to affect the audit quality to a substantial extent, as auditors with time span are aware of the risks and credibility that a business organisation is attached with. It is also ascertained that there are certain business organisations adopting the policy of auditor rotation, which are seemed to increase complexities as well as cost due to rotation during important business transactions (Whitehouse, 2013). In this regard, the essay emphasizes the audit quality and the policy of rotation of auditors. ...
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