The Effect of Non-Adoption of the Compulsory Rotation of the External Auditor in the Quality of Audit and Detection of Errors - A Field Study in Companies and Offices of the Iraqi Audit

Abstract

The purpose of the research was to determine the nature of the external auditor's mandatory turnover, its advantages and disadvantages, and the agree and disagree opinions, as well as the effect of the mandatory external auditor's turnover on the quality of audit. The research concentrate in its application section on errors appeared in auditing process by using a survey of a selected sample of auditors working in the Iraqi audit firms, which was problematic by asking the auditors whether the areas of mandatory change of the external auditor affect the quality of the audit process and to enhance the discovery of errors. Fifty four auditors working in Iraqi stock exchange were chosen to test the quality of the audit, and through a questionnaire to organize a survey and then analyze descriptively and statistically the answers of the sample of auditors. The research reached a set of conclusions the most important were:1.The external auditor turnover is a means to enhance the independence and quality because it prevent consolidation of the relationship between the auditor and management, since the distinction must be made between audit firms directed to the capital market, and audit companies that are not directed to the capital market.2.The main factor that the external auditor losing the objectivity and independence is the lack of professional doubt in the audit process. This usually results from the length of time spent by the auditor in the same place, in which case it becomes non-renewable and does not reach sufficient new evidence other than what it reached in the past.The research came out with a set of recommendations, the most important were:1.The need for the legislative and regulatory bodies in Iraq, including the professional auditing board to determine the duration of the auditor's link with the customer, for example, the duration of the link to be limited to five years, and emphasis on the auditor's turnover to improve the quality of audit by maintaining the independence of auditors. The auditor's contact with the customer adversely affects the quality of the audit.2.To raise awareness of companies and businesses of the importance of the rotation of the External Auditor for the advantages that serve both parties