The PCAOB has conducted a public meeting with a wide variety of speakers commenting upon the PCAOB's recent proposal to mandate periodic rotation of audit firms. Paul Volcker, former Chairman of the Federal Reserve, spoke on March 21, 2012 and strongly advocated adoption of the controversial proposal. Noting that discussion of mandatory rotation makes accounting firms "nervous," he expressed concern that absent mandated rotation, audits are less responsive to the investing public.
Volcker's analysis is in sharp contrast to that contained in the Forum's comment letter filed with the PCAOB in December, 2011. As the Forum's letter notes, mandatory firm rotation would impair the ability of an audit committee to do its important work, a result contrary to the express purpose of recent regulatory initiatives designed to strengthen the responsibilities and independence of audit committees. The Forum's comment letter notes that the Concept Release cites no empirical evidence - and the Forum is aware of none - showing that mandatory audit firm rotation has any positive impact upon auditor independence, objectivity, and skepticism. The proposal would, however, raise costs to shareholders. The Forum's comment letter questioned the justification for imposing additional shareholder costs in return for speculative potential benefits.
The Forum's comment letter is here: http://www.mfdf.org/images/uploads/newsroom/Auditor_Rotation_MFDF_Final.pdf