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Mandatory External Rotation of Accountant Offices - Essay Example
Author : ycollins
Finance & Accounting
Pages 7 (1757 words)
Mandatory External Rotation of Accountant Offices Name Name of Institution Mandatory External Rotation of Accountant Offices 1.0 Introduction In the aftermath of When European financial crisis was over the European commission issued the Green paper as the aftermath of the crisis in order to analyze what happened and how to avoid the same kind of problems in future…
The aim of these new audit policies was to resolve the financial crisis on a dynamic market, as well as to set out the objectives of auditing. In the U.S., the Securities and Exchange Commission is responsible for spelling out audit requirements. The SEC is more focused on internal audit as compared to external mandatory rotation of audit firms. Financial accounting reporting and auditing have been the key areas affected by the European crisis. In an attempt to resolve the predicament, both Europe and the U.S. have tried to come up with rotation. Rotation has been viewed as a solution to mitigate the threats associated with financial independence generated by developed nations (Mihaela et al., 2010). At a time when the world is facing a crisis new audit policy has to be a crucial factor in avoiding losses. Auditors usually find themselves in a fix due to the fact of being familiar with the management and being intimidated by their clients, which adversely leads to long-term client-audit relationship. Over the recent years, the subject of long-term audit and client relationship has raised eyebrows within public and social realms. ...
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