The Best Argument Against Mandatory Audit Firm Rotation Is That

question 41

Multiple Choice

The best argument against mandatory audit firm rotation is that:

• A) Audit fees will tend to increase when a highly qualified and experienced auditor is arbitrarily forced to stop serving an audit client
• B) It will lead to undignified competition as unprincipled successor auditors reviewing a predecessor auditor's work will be publicly critical of the predecessor to bolster their own reputations
• C) The "learning curve" efficiencies achieved by the first audit firm will be sacrificed when a new, inexperienced successor auditor is appointed
• D) The ethical leadership provided by large CPA firms will be diluted by the market entrance of newer, more aggressive competitors

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Definitions:

Conditional Distributions

Probability distributions for a subset of outcomes within the sample space, given that certain conditions are met.

Salesmen

Salesmen are individuals who sell goods and services to customers, aiming to meet customers' needs while achieving sales targets.

Delivery Services

Companies or agents that transport goods from one location to another.

Late Packages

Late packages refer to parcels, mail, or cargo that are delivered after the expected delivery time.