Does the rotation of auditors improve the quality of auditing Essay - 1

Does the revolution of attendants improve the quality of scrutinizeing - Essay ExampleAustralia is ingathering more empirical data on the subject to make a decision to make it requisite or non. India recently envisaged that audit collaborationist should be rotated compulsorily and there should be atleast 50% rotation of the audit team compulsorily. For listed companies, auditor rotation is made compulsory in Portugal on an beg off or comply basis. Public companies in Slovenia are given a choice to choose both to rotate partner or audit firm rotation once in five years. analyze partner rotation instead of audit firm rotation is made mandatory by countries worry Netherlands, Germany and UK. Administrators in Germany, US and UK are of the view that possible advantages of compulsory rotation of auditors do not shade off its perils and costs. (Ewelt-Knauer, Gold & Pott 20125) The research weigh get out analyse in detail whether the rotation of auditors improves the quality of auditing or not with available literature evidence on the subject. What is the problem? The main issue is whether mandatory auditor rotation will result in enhancing the auditors independence or not and does the rotation of auditors improve the quality of auditing? How are you going to answer it? For answering the research question, this research essay will make use of secondary research evidence available on the subject like schooling available in the books, journals, previous empirical studies, etc. Coherent development of arguments According to Lee Metcalf report, it was a great concern that big audit firms lacked independence, which has created doubt about their certification of financial data to humans and investors. Further, abundant association of an auditor and a connection may result in aligning with companys management and hence, the independence of such an auditor has become really doubtful. Thus, Metcalf report recommended to the Congress of ground forces to introd uce mandatory auditor rotation to minimise the corporate frauds. (PCAOB 201110). What is audit quality? Some study suggests that there is a direct association between audit quality and audit tenure. According to Simon & France (1988), long run audit tenures enhance the audit quality, mainly because of auditee-specific knowledge benefited by the auditors over the time. Daly, Hamilton and Strokes (2003) investigated whether audit partner rotation is linked with transformation in audit quality and found that a partner reassign or rotation is not poignantly linked with a change in the audit imprint released. Further, rotation of a partner does not result in more chances to issue a pendent audit report. Thus, this study report suggests either the rotation of the firm or a partner does not have required audit quality advantages that supporters vehemently argue. (Campbell & Houghton 200578). Vanstraelen (2000) found that long-term audit tenures resulted in utmost audit quality. Deis & Giroux (1992) found that long run audit tenure lessens the adherence with GAAS. Copley & Doucet (1993) found the audit tenure, and the audit firm association has a direct effect on audit quality. Knapp (1991) exposed that audit military commission members observed that long audit tenure erodes audit report quality and their independence. Dopuch, King and