Audit Rotation Only Good in Theory, CFOs Say

Recently polled chief financial officers were wary of the Public Company Accounting Oversight Board's recent suggestion to instate a mandatory auditor rotation for companies, CFO Journal blogger Emily Chasan wrote Monday.

• The PCAOB supports compulsory rotation to avoid auditors becoming "too cozy" with companies, Chasan writes.
• Finance executives polled by CFO Journal said that the move could undermine solid auditing because it can take at least a few years for auditors to learn the ins and outs of a company.
• The CFOS also worried about the cost of mandatory rotation, a practice that they say has had mixed results in other countries.
• Companies in the Standard & Poor’s 500 index have worked with the same auditor for 24.5 years, Chasan wrote, citing data from Audit Analytics.