Describe some of the reasons why there have been calls for mandatory rotation of audit firms. How could an investor of a public company determine how long an audit firm has served as that company's auditor?

Describe some of the reasons why there have been calls for mandatory rotation of audit firms. (Select all that apply.)

A.

Some clients have retained the same audit firm for decades, creating a question as to whether the audit firm is truly independent.

B.

Mandatory audit firm rotation will likely increase audit quality by increasing auditor independence and professional skepticism.

C.

Mandatory audit firm rotation would decrease fees due a new firm representing the client, which would likely result in higher audit quality.

D.

Because of the growing trend in impairment of independence issues such as legal liability, PCAOB inspections, enforcement actions, and the threat of being sanctioned for violations of the Code of Professional Conduct, a mandatory rotation would allow the auditor to have a period where they would not be liable under all of these areas.

How could an investor of a public company determine how long an audit firm has served as that company's auditor?

auditing standards require the audit firm of a public company to disclose in

the auditor's report the year in which the auditor began working as an employee of the auditing firm.

the auditor's report the year in which the auditor began serving consecutively as the company's auditor.

the board of directors' notes how long the auditor has been working as an employee of the auditing firm.

the board minutes the year in which the auditor began serving consecutively as the company's auditor.

The disclosure

follows the auditor's signature in the auditor's report.

immediately follows the basis for opinion paragraph in the auditor's report.

is directly below the auditor's opinion section in the auditor's report.

is mentioned in the annual board minutes and additional notes to the board.