The European Union is proposing a rule change for auditing firms in Europe. They want to ban audit firms from offering most non-auditing services to their clients and t require that large companies rotate their auditors. This proposal is intended to increase competition between auditing firms. It is also designed to end such a relaxed relationship between auditors and their clients.
The United States is also planning a change for auditing firms. The public company accounting oversight board wants to implement the idea that companies must rotate audit firms. The reasons for the change in the United States are the same as the ones for changing in Europe.
With frauds to seem to be happening all the time, change had to happen. There was obviously a lot of serious problems with auditing, including that firms were getting too comfortable with their clients and didn't want to ruin their relationship with the client. This makes it a tough situation for the auditors because if they give their clients a bad report then they will lose them as a client. So i think that this proposed rule change will actually benefit both parties. As long as no one has anything to hide then this rule should be a good idea.
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