The PCAOB continued to gather comments on auditor rotation with a day-long public meeting in San Francisco on June 28.
This time around, more of the comments seemed supportive of the PCAOB’s proposal to require public companies to rotate their auditing firms.
Former SEC chair Harold Williams said in his testimony that he supports mandatory rotation but wasn’t sure it would break up the "oligopoly" of the Big Four. He said that while there will likely be increased costs, he felt they would be justified.
“I do not believe that the quality of the audit needs to deteriorate for the first year or two of the new auditor’s work. The concern that audit quality might deteriorate in the last several years of the departing auditor’s engagement casts serious doubt on confidence in its professionalism and suggests a more serious problem that I trust is not warranted.”
Former SEC deputy chief accountant Andrew Bailey, who now teaches at the University of Illinois at Urbana-Champaign, told the PCAOB he doesn’t have much confidence in audit committees to detect audit failures.
Read detailed coverage from Accounting Today.