Recent accounting scandals, including Enron, WorldCom and Qwest, have led to major changes in the auditing industry, particularly the dissolution of Arthur Anderson (Certified Public Accountants), the company's auditor in 2002. The scenario has become all too common where a large public listed company receives an unqualified report from an auditor and, shortly after, collapses with the announcement that the financial statements were materially misstated.

Required:

Discuss THREE (3) advantages and THREE (3) disadvantages associated with the need for mandatory auditor rotation. (6 marks)