October 23, 2021

PCAOB Member Jay Hanson Repeats His Belief That Auditor Rotation Is Not Gonna Happen

The Brits can do whatever they want; Mr. Hanson has a story and he's sticking to it:   

Having reviewed the comment letters and feedback from the round table panelists and others, it is clear to me that there is little support for mandatory audit firm rotation. As I noted in my statement when we issued the concept release, our inspection findings over the years have yielded a substantial amount of data. To date, I have not seen an analysis of this data that establishes a causal link between an audit failure and the audit firm tenure. I do not see how the Board could move forward on mandatory rotation without that causal link. I also believe mandatory rotation would be extraordinarily difficult to justify through an economic analysis of its costs and benefits.

[PCAOB]

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