It’s not often that emotions run high in the relatively staid world of auditing, but a new rule intended to protect investors has sparked a furious behind-the-scenes battle that may yet end up in the constitutional court.A few weeks ago the Independent Regulatory Board for Auditors (IRBA) revealed that it would implement a mandatory audit firm rotation, essentially forcing companies to change auditors every few years. It’s a practice used in European countries, where audit firms must be changed every 10 years.Bernard Agulhas, CEO of the regulator, says the aim is nothing more than to ensure auditors are properly independent from the companies whose accounts they sign."If auditors aren’t properly independent and are too cosy with their clients, the audit quality will be compromised, and shareholders will not have confidence in the information reported. This change will also allow for transformation as smaller auditors can now get a foot in the door," he argues.If tenure alone diminis...
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