Does the rotation of auditors improve the quality of auditing Essay - 5

Does the rotation of take stockors improve the gauge of studying - Essay ExampleAuditing had neer been influential and applicable as it is today. Each corporation feels the need to examine its accounts from time to time, and especially when modification is about to occur, so that it can determine their correctness and fairness, as well as detect of any(prenominal) irregularity. Auditing is broad and can be conducted for systems, data, and finances which are of great concern in this context. Auditing can be described as an examination and verification of accounting data with an aim of establish the correctness and reliableness of the accounting reports and statements (Shirin, 2009). However, numerous controversies exist over establishing a standard against which actual audit performances can be measured. Therefore, organizations may have difficulties in assessing the rough-and-readyness and property of their audit, even if it serves the purpose. Audit quality has been describe d by Fearnley et al as the market assessed joint probability that a given auditor will two discover a break-dance in the clients accounting system and report the breach (2011, p. 2007). Organizations committees and shareholders need enhanced audit quality for the sake of delivering appropriate organization audit results and opinions. Firm rotation of auditors has been campaigned for and applied in some countries as a way of improving audit quality. The issue of audit quality that auditors rotation attempts to address There are several factors that affect the quality of audit. Nowadays, clients want to be confident of the financial reports they get, to make future projections of the business. Internationally, various initiatives have been proposed to establish a standard or enforce some consistencies across borders, in how the auditors ought to accomplish the audit objective, and what financial statements clients should await (ICAEW, 2010). The number of recently reported financia l failures in organizations call for more accountability and undertaking of nucleusive measures for countries, firms, and audit practitioners, whom are all affected in case of any unexpected undesirable effect after auditing. There have been cases of firms experiencing frauds and even bankruptcy after a repetitive auditing by particular(prenominal) auditors, while auditors are sometimes prevented from delivering certain quality audit results due to differences in countries regulations, economic incentives, their ability, and expertise. Considering the comprehend audit failures, there is an urge for audit effectiveness and efficiency to enhance clients confidence in the quality of audit reports. This remains the greatest problem in quality control. Rotation of auditors is one of the strategies recommended, but clam up debatable over its success in promoting audit quality. Rotation of auditors The concept of auditors rotation is related to contrast rotation of employees, but unli ke the later, which is intended to enhance motivation, the former has clear based objectives to impact on the quality of audits. Due to the established failure and fraud cases when a former auditor has been reemployed for a long-lasting term by a specific client, companies avoid hiring similar auditing firms for a subsequent number of years to conduct their audits. The issue surfaced since the 90s and proposes that audit firms serve as client auditors for a certain period, then replaced by others. AICPA requirement proposes seven years of an auditor firm or auditor service, after which rotation occurs