The U.S. regulator for auditors is formally considering whether to force public companies to routinely replace the firms that audit their financial disclosures.
The Public Company Accounting Oversight Board voted 5-0 today to open a public comment period on the idea of establishing term limits for auditors. Proponents said such restrictions may eliminate inappropriate company influence on long-term auditors.
“The long association of the largest audit firms with their major audit clients is an issue that must be addressed in order to fulfill the mission of the PCAOB,” said Chairman James R. Doty before the vote. Mandatory rotation of auditors should be considered because of “the very size, complexity and systemic risk found in today's issuer population,” Doty said.
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