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. Mandatory external rotation of accountants’ offices is believed to increase auditor independence and quality of audit and financial reporting (Velte & Stiglbauer, 2012). On the other hand, external auditing increases the cost of auditing in the first two years. This is because the risk of liability from auditors is significantly high in the first two years than within subsequent years. Due to the audit concentration of the four big companies, external mandatory rotation is almost not realized. The big four has a command on the number of companies they audit each year. In addition, the big four has vast experience in consultancy and have advisory services to attest to it. Therefore, this makes it hard for small and mid-sized accounting firms, which are looking forward to enter into a new market (Velte & Stiglbauer, 2012). In other cases, there have been arguments on the quality of auditing in regards to mandatory external rotation. Some circles believe that auditors conduct their reports poorly. This is because new auditors tend to ignore the going concern opinion (Velte & Stiglbauer, 2012). Rotation increases the rate of denying auditors approval due to fear of capital markets. Rotation has an impact on the capital markets and therefore management applies pressure on auditors. As a result, Companies make the auditors comply to avert the risk of losing their public image (Velte & Stiglbauer, 2012). In some cases however, the quality of audit can be explained by a lack of experience from the auditors. Such a situation cannot be resolved by mandatory external rotations. In this essay, the issue of implementing mandatory external rotation might be complex as was in Spain's case (Aguilar et al., 2006)., The examples of Corporations will be cited in discussing the effectiveness of mandatory external rotation by using the empirical research method. 2.0 Theoretical Framework External mandatory rotation has been a subject of debate in the accounting profession and in the public eye. The Spanish case for instance shows that regulation in accounting and auditing is a more precarious process than suspected (Forgaty et al., p. 181). Spain is a good example of how mandatory rotation
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…
These codes have evolved to what is known today as the UK Corporate Governance Code, the latest of which was released in 2010. The UK Corporate Governance Code 2010 sets principles out the principles of ideal and best practices in corporate governance. The UK Corporate Governance Code of 2010 is required by the Financial Services Authority listing rules to get all listed companies on the Stock Exchange to use the UK Corporate Governance Code.
There is mounting evidence that any form of organizational or management change, e.g. the deployment of digital technologies, affects the economics of operational and managerial processes and also activates wide-ranging social and organizational effects (Bhimani).
Especially, pursuing the career of tax accountant is an appreciable task as it ensures the overall development of the individual. It also prepares one to retain capabilities required to bear out the maximum benefit of opportunities.
Although the job of tax accountant is
The case of James Alderson, an accountant who blew the whistle on the hospital that he worked in, is a wonderful example of a man who knew the odds and yet was determined to do what was right. The principle of accurate and correct disclosure was being violated
However, growing evidence suggests that the practice may actually cause health problems, as well as the realization that there is denial of the right to informed consent. An increasing number of concerned individuals and parents have
However, the main challenge in this occasion included how to put fluoride on the children’s teeth without complicating problem.
I got at the elementary school at 7:50, which was too early. First, The Head Start assistants and coordinator
At the time, I was able to observe and assist the first hygienist. The hygienists used two set of instruments; these can be classified as basic and scalar instruments. The significant aspect of the scalar set was the fact that it only had three instruments.
They also get the opportunity to come up with new skills and experience the pleasure resulting from the activities concerned with impacting positively on other people’s lives, as well as the volunteers’ lives. Volunteering can similarly be said to be an
3 pages (750 words)Essay
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