Audit Partner Rotation in Australia

This assignment examines the practice of audit partner rotation in Australia. It discusses the relationship between audit fees and partner rotation, both voluntary and mandatory, highlighting the advantages and disadvantages. The analysis explores the impact of rotation on audit quality and financial reporting, using Australian examples and regulations where partners are required to rotate every five years. The assignment delves into the cost-benefit implications and variations across sectors, drawing evidence from research and data.

Running head: AUDITING AND ASSURANCE IN AUSTRALIA
Auditing and Assurance in Australia
Name of the Student
Name of the University
Author Note

1AUDITING AND ASSURANCE IN AUSTRALIA
Auditing and Assurance in Australia
The benefits and cost of rotating partners are as follows:
The rotation of partners and audit fees has a significant relationship. The higher the audit
fees will affect both the voluntary and mandatory audit partners rotating. The audit rotation is
becoming a practice in many jurisdictions in enhancing the audit practices. The auditor partner
can become unfamiliar to the client management if the rotation takes place often. Audit partner
rotation is cheaper than the audit firm rotation. If there is independent working of the auditors
then it leads to the improved quality and financial reporting.
Audit Quality Concepts
It is seen that the cost and the benefits of the audit partners’ rotation is very restricted as
no proper data is received. This is also restricted because only few countries have disclosure of
company’s audit. In Australia the audit partners rotate on every five years. The rotation is
mandatory if the partner is in charge of the audit after five years and it is voluntary if it is for
short tenure. Australia is one of the countries which disclose its partners name in the audit report.
There is an association of mandatory and voluntary audit. There is also evidence which shows
that there is a difference between audit fees and rotation in Australia extending the research that
is found that the research varies across the sectors.