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Compulsory periodic rotation of engagement partner

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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?

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