The inverse correlation between auditor tenure and audit quality problems implies that shortening
average tenure
w
ould have negative effects, but proponents of mandatory r
otation maintain that a
regular change in audit firms is beneficial. We reviewed the literature to evaluate these
competing
assertions.
We
found
66
papers assessing audit firm rotation. Of these,
4
9
were based on
empirical
data.
Thirty
seven
or
7
6
percent
generally reached conclusions unfavorable to mandating rotation
.
Eight
of the
empirical studies
supported
mandatory rotation
and
four
did not express a conclusion favoring either
10
view
.
The other
17
papers were opinion
-
based pieces. Of those
17
,
nine were
a
gainst mandatory
rotation,
seven
supported it, and one
took neither
side
.
20
Thus for both types of analysis a
majority did
not favor
mandatory rotation,
and
the proportion against it was higher where the analysis was conducted
using empirical da