Does the rotation of auditors improve the quality of auditing Essay - 1

Does the rotation of auditors improve the quality of auditing - Essay Example Australia is collecting more empirical data on the subject to make a decision to make it mandatory or not. India recently envisaged that audit partner should be rotated compulsorily and there should be atleast 50% rotation of the audit team compulsorily. For listed companies, auditor rotation is made compulsory in Portugal on an explain or comply basis. Public companies in Slovenia are given a choice to choose either to rotate partner or audit firm rotation once in five years. Audit partner rotation instead of audit firm rotation is made mandatory by countries like Netherlands, Germany and UK. Administrators in Germany, US and UK are of the view that possible advantages of compulsory rotation of auditors do not overshadow its perils and costs. (Ewelt-Knauer, Gold & Pott 2012:5) The research study will analyse in detail whether the rotation of auditors improves the quality of auditing or not with available literature evidence on the subject. What is the problem? The main issue is whet her mandatory auditor rotation will result in enhancing the auditor’s independence or not and does the rotation of auditors improve the quality of auditing? How are you going to answer it? For answering the research question, this research essay will make use of secondary research evidence available on the subject like information available in the books, journals, previous empirical studies, etc. Coherent development of arguments: According to Lee Metcalf report, it was a great concern that big audit firms lacked independence, which has created doubt about their certification of financial data to public and investors. Further, long association of an auditor and a company may result in aligning with company’s management and hence, the independence of such an auditor has become really doubtful. Thus, Metcalf report recommended to the Congress of USA to introduce mandatory auditor rotation to minimise the corporate frauds. (PCAOB 2011:10). What is audit quality? Some stud y suggests that there is a direct association between audit quality and audit tenure. According to Simon & France (1988), long run audit tenures enhance the audit quality, mainly because of auditee-specific knowledge benefited by the auditors over the time. Daly, Hamilton and Strokes (2003) investigated whether audit partner rotation is linked with transformation in audit quality and found that a partner change or rotation is not poignantly linked with a change in the audit opinion released. Further, rotation of a partner does not result in more chances to issue a qualified audit report. Thus, this study report suggests either the rotation of the firm or a partner does not have required audit quality advantages that supporters vehemently argue. (Campbell & Houghton 2005:78). Vanstraelen (2000) found that long-term audit tenures resulted in high audit quality. Deis & Giroux (1992) found that long run audit tenure lessens the adherence with GAAS. Copley & Doucet (1993) found the audit tenure, and the audit firm association has a direct effect on audit quality. Knapp (1991) exposed that audit committee members observed that long audit tenure erodes audit report quality and their independence. Dopuch, King and

Do Only What You Feel Like Doing as a Today's Philosophy of Life Research Paper

Do Only What You Feel Like Doing as a Today's Philosophy of Life - Research Paper Example People seem to be so eager to have more, that they even forget about their own lives and concentrate primarily on satisfying their material needs. It's not only about ensuring a comfortable life anymore, but it's also about luxury we are talking now, and about making things so easy, by introducing technology everywhere, that we even forget that this means "easy" and we get to think it has always been the same. Men have always had this tendency towards exaggerating, mostly when it comes to getting rich or powerful and there have always been philosophers who noticed it. Plato was one of them. He insisted on the idea that man should be moderate, should balance his desires. Moderation doesn't mean repression, but it means that you shouldn't satisfy only one need, one desire, in the detriment of other needs. The philosopher convinced that virtue is all that is relevant for happiness, is also convinced that the soul is immortal and that it comes from a world different from the material wor ld where we live with our bodies. And in the Greek philosopher's view, we should cultivate virtue and reason rather than desires that belong to the material world. According to Plato, there are two possible ideas for man's life: one which means that the ultimate purpose of life is a pleasure and the other one according to which the purpose of life is that of Good. Everyone knows that our life here is not eternal, that at a certain point, sooner or later, at a younger or older age we are going to die. So our life here ends. And then comes the question: what happens after that? When it comes to a question like that, people's opinions differ.  Some think this is all, others consider that the end of this life means the beginning of a new life, of a life beyond our senses and beyond materiality.