GAO study on audit firm rotation
02 Dec 2003
The US General Accounting Office (GAO) has published its report on Public Accounting Firms – Required Study on the Potential Effects of Mandatory Audit Firm Rotation.
The study was mandated by the Sarbanes-Oxley Act of 2002.
Click to Download the GAO Study (PDF 575k).
"GAO believes that mandatory audit firm rotation may not be the most efficient way to strengthen auditor independence and improve audit quality considering the additional financial costs and the loss of institutional knowledge of the public company's previous auditor of record, as well as the current reforms being implemented. The potential benefits of mandatory audit firm rotation are harder to predict and quantify, though GAO is fairly certain that there will be additional costs." |