The global banking crisis brought to the fore questions surrounding the scope and quality of the external audit, market concentration and auditor independence. One of the issues currently being considered by the European Commission and European Parliament is mandatory audit firm rotation. ICAS believes that policy decisions should be based on independent evidence and is commissioning this literature review on audit firm rotation to serve as a sound platform for policy making and future research.
The aim of this commissioned literature review is to identify, consider and evaluate the existing evidence on mandatory audit firm rotation. The findings should serve to inform future policy making. The literature review will bring together any existing research/professional literature on:
- The impact, if any, of audit firm rotation on audit quality.
- The experiences of countries adopting mandatory audit firm rotation, including
the time frames selected for rotation.
- Views of companies, auditors and stakeholders on audit firm rotation.
- The cost implications of audit firm rotation.
- The advantages and disadvantages of audit firm rotation.
- The impact, if any, of audit firm rotation on auditor independence.
- Whether audit firm rotation leads to increased choice in the market place for
the largest companies.
Description and scope of the literature review
The review should be written as a short accessible document that summarises the existing evidence on mandatory audit firm rotation, highlights any deficiencies in the existing literature, identifies opportunities for further research and makes recommendations for policy makers.
It should cover high quality research from the major international markets and jurisdictions with experience of mandatory audit firm rotation. The successful applicant(s) will demonstrate how access to this literature can be assured.
The review should distinguish between the different types of literature reviewed, for example, that which is based on empirical versus theoretical approaches. The review should include a critical assessment of any surrogates used to evidence audit quality.
Terms of agreement
Final drafts of the literature reviews are to be delivered by 31 August 2012 and authors may be required to make short presentations of key findings to the ICAS Research and Audit and Assurance Committees and a presentation of findings at ICAS sponsored events. Reports should be approximately 5,000-10,000 words in length. Draft reports will be fast-track reviewed using practitioner and academic reviewers, with a view to publication and use by both ICAS and policy makers. Funding of up to £5,000 is available to undertake this review, which may be payable as a fee to an individual or a university.
Publication in academic journals, following submission of the final report, is also encouraged. It is essential that the research report should identify the public interest in these issues and be of interest to policy makers, regulators, members of the profession and academia.
Expressions of interest
If you are interested in undertaking the review, please email a short expression of interest together with summary CVs to firstname.lastname@example.org by 30 April 2012. You should explain why you believe you or your research team are suitable individuals to undertake the review, demonstrating your knowledge and experience in the area. You should specifically state how any team will be structured and how any translation issues will be addressed and responsibilities for completion of the report. A preliminary list of references should be provided together with a summary of key issues that you believe are likely to arise from the review. The expression should include the amount of grant, in sterling, which you require to complete the project and a breakdown of the estimated costs. The expressions of interest will be considered by a panel of academics and non academics from ICAS to arrive at a final decision. Applicants will be advised of the decision by 14 May 2012.
For further information about this funding opportunity or any queries please contact the ICAS Research Centre:
Tel: +44(0)131 347 0237
Research will be funded by
The Scottish Accountancy Trust for Education & Research (SATER)
(Scottish Charity No. SC034836).
CA House 21 Haymarket Yards Edinburgh EH12 5BH