Auditor rotation—whether mandated or voluntary—is on the increase. While this may be good from an independence point of view, our research suggests that it’s going to lead to lower levels of satisfaction among audit clients. Auditor-client relationships tend to be at their weakest, not immediately after a new audit contract has been let and when hopes are high about innovation and improvement, but a year or two later, perhaps because some of that early promise hasn’t been fulfilled. It probably doesn’t help that this is also the period when the audit fee is most likely to rise.
Based on data about audit fees in the US, German, UK and French markets, a survey of 200 US CFOs in major organisations, and in-depth interviews with audit committee chairs, this report will analyse patterns of rotation, by client sector and size. We’ll also look at, not just which firms have been winning and losing, but at the patterns that may explain why some firms have been doing better than others.