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September 2010

IFAC president warns against auditor rotation

By Raman Jokhakar
Tarunkumar G. Singhal
Chartered Accountants
Reading Time 1 mins
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71 IFAC president
warns against auditor rotation

Mandatory auditor
rotation makes no sense, according to International Federation of Accountants
president Robert Bunting.

“While firm
rotation might seem to remove any bias that may be attached to past decisions,
it makes no sense at all,” Bunting said.

“In most parts of
the world there are not enough choices to allow for this without forcing
companies to choose audit firms that have no expertise in their industry.”

Bunting said a
number of countries have experimented with mandatory rotation before abandoning
it as almost impossible to implement. Yet, it is still being considered as a
remedy to the Satyam scandal in India.

It would not be a
pragmatic solution and would set the country apart from nearly all of its
trading partners, Bunting said.

(Source : www.ifac.org)

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