08-03-2003, 12:37 AM
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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.
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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
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></font id=quote><font face="Verdana" size=2 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
