Compulsory periodic rotation of engagement partner

Compulsory periodic rotation of engagement partner

Increases auditor independence which addresses the deficient performance component of the AEG.

Arguments for

• Compulsory rotation of audit firms would help reduce the AEG, due to its positive effect on auditor independence

Arguments against

• Auditor rotation increases cost and time involved in completing an audit while reducing audit quality.
• Additional time and effort is required by the incoming partner to familiarise themselves with the client’s business
• Also, the lack of prior experience may affect incoming audit partners judgments, reducing audit quality

Over to you

Do you agree with these arguments? Why?