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Mandatory auditor rotation is designed to address a potential conflict of interest between a public company and its auditor. Because an auditor is hired and paid by the public company it audits the auditor's desire to maintain a good relationship with its client could conflict with its duty to rigorously question the client's financial statements.
- Robert PozenPhoto by Jesse Gardner on Unsplash
Mandatory auditor rotation is designed to address a potential conflict of interest between a public company and its auditor. Because an auditor is hired and paid by the public company it audits the auditor's desire to maintain a good relationship with its client could conflict with its duty to rigorously question the client's financial statements.
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