Should there be Mandatory Rotation

Should there be Mandatory Rotation - Printable Version

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Should there be Mandatory Rotation - irfanahmedmeer - 08-01-2003

Even in USA there is no mandatory rotation. The real question is should there be mandotory rotation. It may create an enviorement in which auditors will be more under pressure from client especially big groups so that once they have to give up some client they will be given some other in return

What do you think

Irfan

- smraza - 08-01-2003

Agree with Irfan,
Now the Audit Firms are required to establish the marketing department, bcaz they will be losing their clients after some period <img src=icon_smile.gif border=0 align=middle>

S M R

- CBPian - 08-02-2003

I would say there should be rotation. Smaller audit firms should be allowed to make some money. And we should trust their professionalism.

- Muhammad Nauman - 08-02-2003

I think mandatory rotation improves the quality of audit.
It also helps in improving quality competiton between audit firms and enhance independance of auditors.

Further, there will be chances for new and small firms to improve thier Clientele.

But in my point of view the rotation of partners of the firm cannot fulfill the objective of rotation. The rotation should be of audit firm but the least acceptable thing is the rotation of partners.

- smraza - 08-03-2003

<BLOCKQUOTE id=quote>quote<hr height=1 noshade id=quote>
I think mandatory rotation improves the quality of audit.
It also helps in improving quality competiton between audit firms and enhance independance of auditors.

Further, there will be chances for new and small firms to improve thier Clientele.

But in my point of view the rotation of partners of the firm cannot fulfill the objective of rotation. The rotation should be of audit firm but the least acceptable thing is the rotation of partners.

<hr height=1 noshade id=quote></BLOCKQUOTE id=quote>

I dont agree with you nauman regarding the improvement in audit quality, i would like to tell you whenever a company hires a new auditor, the audit of first two year is most risky as the new auditor takes time to understand the affairs of the company, bcaz he dont have any background knowledge of the company, [if u have attended the Seminar on COCG held at ICAP, then you must know all the baba e Icaps were agree upon the above statement](me too),

as far as the clintele of small firms is concerned, that will not be affected (i think so) bcaz, all firms will mutually exchange their audits, e.g. Firm "A" will ask Firm "B", i have the audit of ABC company whose Audit Fee is Rs.______, i m gonna give the audit of this company, in return give me the audit of same size company having almost the same fee.

and it will be little bit difficult for the firms to find out the firms having same audits like they have.

thats why i mentioned in my last post that every firm will have to establish a marketing department.

S M R

Edited by - smraza on Aug 02 2003 74509 PM

- irfanahmedmeer - 08-06-2003

Well Mandatory rotation look very good on paper to many peaple they say it wil improve the quality of the audit.

I agree with the SMRAZA that it will have negitive impact on quality. Alrady partners are thinking about having firms in thier own name to whom they can transfer the audit for a year then get it back very next year

so how it will improve the quality?

- Muhammad Nauman - 08-06-2003

Hi s m raza

Will ICAP permits the audit firms to establish the marketing department? Is'nt it against the code of ethics of professional accountants?

- smraza - 08-07-2003

Yar, nauman, dont u understand the joke, <img src=icon_smile_big.gif border=0 align=middle>

S M R

- Muhammad Nauman - 08-08-2003

Yes raza <img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle><img src=icon_smile.gif border=0 align=middle> I failed to understand the joke <img src=icon_smile.gif border=0 align=middle>

- AmA - 09-26-2003

<BLOCKQUOTE id=quote>quote<hr height=1 noshade id=quote>
Hi s m raza

Will ICAP permits the audit firms to establish the marketing department? Is'nt it against the code of ethics of professional accountants?

<hr height=1 noshade id=quote></BLOCKQUOTE id=quote>

hmmmmmmm !

sounds interesting !

but believe me it just sounds interesting !

what does marketing has to do with this profession !

marketing is usually used to portray an unnecessary as necessary, bad as good and bla bla bla....

even if it not so
it makes good a bad, necessary as unnecessary !

so

think a million times b4 marketng the profession

- Pracs - 10-18-2003

yeah i agree, rotation is just going to rotate clients within the Big 4 (or Big 10 ,, whatever as in pakistan), small firms aren't going to get anything out of it.

Besides a small firm will not have the resources to audit large corporations.

Quality will not improve by rotation, it will improve by peer reviews and legal implications.

- jbladeus - 10-18-2003

Hi everybody

Hey Pracha, long time no see... good to see u back on this forum! <img src=icon_smile.gif border=0 align=middle> Where have u been all this time?

Yeah, i kind of agree that in the situation prevailing here in Pakistan, where assurance business is in the hands of a few, mandatory rotation wont help the situation and audits will remain in the hands of those few big players.

Dear Ama, from your statements it seems that marketing is something a sinful activity, something close to devil-worship!!

Marketing just like any other line of work and has its good and its bad aspects. Please do not generalise the whole profession as something bad. Its these generalisations which has created so much chaos in today's world.

________________________
Arrrgh... it sure's gonna be mighty rough sailin' today ... mates!