ABSTRACT
There has been a long-standing debate as to the relative merits of mandatory auditor rotation. In the United States (US), Section 203 of the Sarbanes-Oxley Act (2002) (SOX) requires rotation of the lead engagement partner and the concurring review partner at least once every five years. Section 207 also requires a study on the potential effects of mandatory audit firm rotation. After conducting the study, the General Accounting Office (GAO, 2003: 2) concluded that:
mandatory audit firm rotation may not be the most efficient way to enhance auditor independence and audit quality, considering the costs of changing the auditor of record and the loss of auditor knowledge that is not carried forward to the new auditor.
