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Friday, September 28, 2012

Board Directors Oppose Mandatory Audit Firm Rotation

The majority of members of public company boards of directors are opposed to proposals for mandatory audit firm rotation, according to a new survey.


The survey, by auditing firm BDO USA, found that 68 percent of the 72 board members it polled indicated they were opposed to proposals from U.S. and international regulators for implementing mandatory rotation of their external audit relationships.
The survey also found that majorities of public company board members do not agree with the use by proxy advisory firms of total shareholder return as an accurate measurement for determining “say-on-pay” recommendations or with the peer groups that advisory firms assign their company for executive compensation comparison purposes. Seventy-five percent of the directors believe proxy advisory firms that consult to public companies suffer from a conflict of interest and that these firms should be subject to regulatory oversight.  
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Source: Michael Cohn http://www.accountingtoday.com