Irba audit plan ‘dilutes rights’
Independent research needed on mandatory rotation’s effect on economy — Chief Financial Officers Forum
Christine Ramon, CEO of the Chief Financial Officers Forum, says mandatory audit firm rotation, as espoused by the Independent Regulatory Board for Auditors (Irba), undermines the rights of shareholders and disregards existing legislation that already safeguards the independence of audit firms. Legislation such as the Companies Act enforces rotation of audit partners and imposes various limitations on audit firms concerning the companies they audit, Ramon says. Meanwhile, shareholders are able to vote on the re-election of a company’s audit committee at annual general meetings and can vote against reappointment if they have any concerns. Independent research is needed on the effect that mandatory rotation will have on the economy, particularly as it has been implemented and then later repealed in a number of countries, Ramon says. Her comments on Friday came amid Irba plans to require listed companies to change external audit firms every 10 years by 2023 to strengthen their independ...
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