FINANCIAL TIMES: US lawmakers have overwhelmingly voted against a controversial proposal that would have forced companies to switch accountants every few years.
The Republican-controlled House of Representatives voted 321 to 62 in favour of a bill which bans mandatory “auditor rotation” – an idea first floated by the US Public Company Accounting Oversight Board. The PCAOB was created in the aftermath of the WorldCom and Enron scandals to help strengthen the US accounting system.
The PCAOB and regulators including Paul Volcker, the former Federal Reserve chairman, have argued that requiring companies to routinely change auditors would help break up the cosy relationships between businesses and their accountants. Many auditors were criticised for failing to report weaknesses in companies’ financial statements in the run-up to the financial crisis… (more)
