Joined: 07 Apr 2011 Location: United States
Online Status: Offline Posts: 13
Posted: 07 Aug 2012 at 19:50 | IP Logged
How many consecutive years can an Auditor audit the same client before being required by PCAOB rules to switch or rotate out to serve on a different audit?
The answer is either 4,5,6,7 years? Which is it? Thanks.
Joined: 07 Apr 2011 Location: United States
Online Status: Offline Posts: 13
Posted: 08 Aug 2012 at 15:57 | IP Logged
I got the rules for Public Clients, don't know if Non-Public Clients have different rules for amount of years an Auditor can serve the same Client consecutively. Anyone know?
SEC. 203. AUDIT PARTNER ROTATION. Section 10A of the Securities Exchange Act of 1934 (15 U.S.C. 78j–1), as amended by this Act, is amended by adding at the end the following: ‘‘(j) AUDIT PARTNER ROTATION.—It shall be unlawful for a registered public accounting firm to provide audit services to an issuer if the lead (or coordinating) audit partner (having primary responsibility for the audit), or the audit partner responsible for reviewing the audit, has performed audit services for that issuer in each of the 5 previous fiscal years of that issuer.’’.
From January, 2005 CPA Journal: Audit
Firm Rotation and Audit Quality
By
Barbara Arel, Richard G. Brody, and Kurt Pany
JANUARY
2005 - The major financial reporting failures at Enron and
WorldCom, as well as apparent failures at Qwest, Tyco, Adelphia,
and others, led to the financial reporting reforms contained
in the Sarbanes-Oxley Act of 2002 (SOA). SOA’s reforms
directly related to auditors include the establishment of
the Public Company Accounting Oversight Board (PCAOB), increased
audit committee responsibilities, and mandatory rotation of
lead and reviewing audit partners after five consecutive years
on an engagement.
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Topic: Auditing Question on rotating out auditor
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