Does the rotation of auditors improve the quality of auditing Essay - 4

Does the rotation of auditors improve the quality of auditing - Essay Example It is worth mentioning that the role of audit rotation in improving the standards and the efficiencies of audit is duly considered as one of the major determinants of audit quality. It is strongly believed that longer tenure of an auditor links with lower quality of audit and in this context, it can be affirmed that the rotation of auditors require to be taken into concern in order to enhance audit quality on the whole. In this present day context, misrepresentations and frauds have emerged considerably that eventually imposes extensive impacts upon audit quality. The misrepresentations along with the frauds have been arguably caused owing to the augmenting interests of the stakeholders and also the owners belonging to various business organisations. ... Discussing the Principle Need for Rotation of Auditors Impact on Auditor’s Independence It is quite evident that the periodic rotation of auditors plays a decisive role in enhancing the auditing quality of the client company by a considerable extent. It can be apparently observed that the rotation of auditors can be conducted both internally and externally. The auditor’s rotation in both of these forms is duly considered to be one of the chief determinants of enhancing audit quality. This is owing to the reasons of preventing the auditor’s depending relation with the management team of the client organisations and differentiating between the auditing process conducted by non-capital market and capital market oriented corporations. In order to determine the impact of auditor’s rotation on the independence of the auditors, it can be affirmed that the sovereignty of the auditors remains much limited in the context of auditing due to the existence of a special trust affiliation prevailing between them and the management team of the client organisations. Thus, with this concern, it can be affirmed that the independence of the auditors largely rely upon the interrelation, which prevail between the auditors and the management team. Specially mentioning, the principle need for rotation of auditors impose considerable impact on auditor’s performances, making them perform both auditing along with consulting services and preserving the auditing process ethically, irrespective of having close interrelation with the management team of diverse organisations (Velte & Stiglbauer, 2012). Mitigation of Conflict of Interests Apart from depicting the principle need for rotation of auditors in limiting the independency of the auditors, it can also be affirmed that