Mandatory Auditor Rotation in Independent Audit
Abstract
Most notable factors that affects decision process of
investors are existing auditor independence and audit quality during
preparation of financial statements. Auditing scandals occurred in the beginning of this century
diminished the reliability of markets and give rise to questioning
effectiveness of auditing activities. Because of occurred incidents, many countries
established regulatory institutions and put legal obligations in force so as to
upgrade audit quality. Audit rotation which is a must imposition audit firms
obliged to practice is one of the implementations for protecting users of
financial statements. With obligatory rotation, firms have to change their
auditors at certain periods. With this rotation it is considered that
independence of auditors and quality of audit is enhanced. In this study, importance of obligatory audit
rotation, its downsides and advantages are highlighted and effects of auditor
rotation is examined in the light of findings from different countries by
conducting literature review about the issue.
Keywords
Mandatory Audit Rotation,Auditor Independence,Independent Auditing
Kaynakça
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