The integrity of the financial statements is contingent upon the audit.Audit of the financial statements elaborates the dependability of the users of the financial statements upon the reliability of the information provided in the financial statement…
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Being faced by many of the threats the financial statements are deemed to provide true and fair view and audit of the financial statements depicts that whether the information provided in the financial statements are up to the standards upon which the financial statements are to be presented and issued. The quality of the audit is crucial for the integrity and reliability of the information provided and disclosed in the financial statements. With the continuous increase upon the integrity of the financial statements there are efforts made and put in to practice in order to provide high quality audit. Many of the legislations and regulations are formed to excel the quality of the audit so that the quality audit can enhance the integrity of the financial statements. There are many factors, which contributed towards the quality of the audit and their relation with the quality of financial statements, one of which is the rotation of the auditors. The independence of the auditors is one of the major factor which reflects the quality of audit. The impact of the rotation of auditors upon the quality of audit ensuring auditor independence and how the factors affecting the auditors’ independence are tackled with rotation of audit is discussed. Importance of Audit Quality The quality of the audit is crucial for every user as the financial statements fulfilling the information requirement, which is different in every case. The importance of the transparency of information is critical as the users are dependent upon the provided information and that information is needed to be completely free of bias and should present the true and fair view of the company (Zabihollah, et al., 2003). The quality of the audit of the financial statements is decisive for every user as it is the quality of audit that depicts the dependency and reliability of the information provided in the financial statement. Regulations and Principals The importance of the audit is of utmost important as it elaborates the transparency and quality of the information that the company provides in its financial and non-financial statements (Anna & James, 2009). The information that is scrutinized in the audit process depicts the quality of the audit. The quality of audit is measured upon various techniques where the relation of the auditor is one of the major factors that result in the rotation of the auditors. The ethical implication of the audit and the principals provided by the international auditing and assurance standard board are issued in order to guide through the quality of audit. There are various legislations imposed in various countries where the rotation of the auditors is set as compulsory for the company. The importance of the audit is realized and various regulations were made and implemented. The Public Company Accounting Oversight Board has implemented laws that are mandatory to be followed where the rotation of the auditors are set to be followed by the companies. Corporate governance failure caused many of the scandals that gave rise to many of the regulations (Francine, 2011). In the corporate governance the best practice principals denotes the quality of audit to be enhanced when the rotation of the auditor is made after every three years. The corporate governance best practice is dedicated towards the operations of the company, which depicts the
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“Rotation of Auditors Improving Quality of Audits Essay”, n.d. https://studentshare.org/finance-accounting/1496239-rotation-of-auditors-improving-quality-of-audits.
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