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PCAOB Drops Mandatory Audit Rotation

According to a Wall Street Journal report, the Public Company Accounting Oversight Board (“PCAOB”) has decided not to pursue mandatory auditor rotation for public companies.  The report states that during the SEC’s open meeting yesterday on the PCAOB’s 2014 budget, PCAOB Chairman Jim Doty said “[w]e don’t have an active project or work going on within the board to move forward on a term limit for auditors.”  He went on to say that “[w]e nevertheless will continue to think about what impacts independence. There may be a change of focus here.”

The audit rotation proposal was criticized widely in the industry, and Congress passed a bill in July that would prohibit the PCAOB from requiring audit rotation.  The Forum submitted a comment letter on the proposal in December 2011 opposing the idea.