« A Prescription for What Ails Large-Company Audit: Real Medicine, for a Change | Main | Mandatory Auditor Rotation: If PCAOB Sanctions Were "Case-By-Case" »

August 17, 2011



I agree with your post. I listened intently to the PCAOB's meeting and read the concept release with great interest.

What we know: 1) audit costs will increase; 2) audit quality is likely to decrease, at least in the first several years and perhaps the last several years as the best personnel are moved to other audits (particularly on the largest audits, which, as you pointed out, are the ones that matter most; 3)the implementation of such a rule would, at best, be a mess internationally and, at worst, be impossible to implement.

What we don't know: Whether mandatory rotation will have any benefits, let alone benefits that outweigh the considerable costs. How many times did the PCAOB staff say in Tuedays's meeting that they had made no link between audit quality and audit tenure, or that they hadn't done a sufficient root cause analysis to understand whether the audit "failures" were caused by a lack of skepticism attributed to lengthy tenure?

What a waste of PCAOB resources when there are so many other meaningful things they could be doing. They still haven't updated more than half of their interim standards.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)


Never miss a post
Please enter all required fields
Correct invalid entries

Follow Me

  • © 2007-2024 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison