Audit firm rotation - its impact on auditor independence: an irish perspective
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Auditor independence is a cornerstone of the auditing profession and recent challenges of the audit independence assumption have impelled the accounting profession to consider ways of improving the credibility of audit reports. This study examines the perceived impact of audit tenure on auditor independence and whether audit firm rotation should be introduced in Ireland. The associated benefits and drawbacks of the audit firm rotation are analysed, and possible recommendations for improvements to potentially further enhance an auditor’s independence are suggested. The results, based on a survey of the top 20 accounting firms and interviews with 3 of the Irish accounting bodies and two audit regulators, shows that audit firm rotation could be an excellent way to enhance the perceptions of an auditor’s independence. However, it was found that the associated benefits would not outweigh the costs of having this as a requirement. The findings would also suggest that there is a need to develop alternative measures to safeguard auditors’ independence, as there are evidently some weaknesses within the standards that are in place today, otherwise, none of the corporate scandals would have occurred. Further research should be considered regarding other possible recommendations for enhancing the independence of auditors. Some examples include, appointment of company auditors by the state or an independent oversight body, reducing the 10% fee threshold that an auditor must not exceed in relation to audit and non-audit services. Another possible enhancement for independence would be to introduce a government approved body to verify the auditors’ work year after year to ensure they are carrying out their duties to their full capability.
- Theses - Business LYIT 
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