Ernst & Young, KPMG Call on Regulators to Reject Auditor Term Limits

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Senior executives at some of the nation’s largest accounting firms are calling on federal regulators to reject a proposal that they said could hurt the quality of audits at public companies.

The nonprofit regulatory agency, the Public Company Accounting Oversight Board (PCAOB), is currently looking at a measure that would require term limits for auditors working for publicly-owned companies, according to Bloomberg Businessweek.

In all, 4 major finance companies, including Ernst & Young, Deloitte, PricewaterhouseCoopers and KPMG, have criticized the so-called rotation proposal.

It is not a necessary or constructive means to promote auditor skepticism, and we are aware of no evidence suggesting that it will improve audit quality,  Stephen R. Howe, managing partner of Ernst & Young in the U.S., stated in remarks submitted to the board.

The companies contend that the proposal is unnecessary and burdensome to those with finance experience on their resumes and other accounting professionals.

Auditor term limits is just one of a number of ideas being debated by the PCAOB, which was established in the wake of the collapse of Enron.

According to the Bureau of Labor Statistics, employment opportunities for accountants and auditors are expected to increase by 22% through the end of the decade.

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