Auditor rotation is being heavily debated in the accounting world. Due to requirements outlined in the Sarbanes-Oxley Act public companies are required to rotate their lead audit partner every five years. To be clear, this standard does not require audit firm rotation; however, it does require lead audit partner rotation. The PCAOB is also considering mandatory audit firm rotation, and this possible rule change is garnering significant attention. These rotation requirements would not apply to private organizations or nonprofits. As noted in the October 2012 Ohio Society of CPAs newsletter, The Voice, many nonprofits have considered implementing similar guidelines at their organizations as a best practice. There are many pros and cons associated with lead audit partner rotation and audit firm rotation and each organization needs to determine if it is best for the organization to adopt these standards as part of its governance process. It is important to be aware of the applicability of implemented rules, and then to make an informed decision about what is best for your organization.
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