An Evaluation of Mandatory Audit Firm Rotation in South Africa

Following on recent corporate failures, various initiatives are introduced to restore confidence in the audit function. In this regard, the Independent Regulatory Board for Auditors of South Africa announced its plans to pursue mandatory audit firm rotation for the audits of public interest entities. The motivation for this decision was firstly due to concerns raised about independence issues as well as a lack of transformation and competition in the South African environment. This article examines the legal and practical implications of the announcement to enforce companies to appoint auditors for a limited period of time. The article contributes to the scarce literature on the audit profession and in particular issues pertaining to the independence of auditors. Against the background of the global business world and the existence of multinational companies, the results are also relevant in an international context.