Corporate Governance

Comments to PCAOB Regarding Concept Release on Auditor Independence and Audit Firm Rotation

Office of the Secretary
1666 K Street, N.W. Washington, D.C. 20006-2803

Re: PCAOB Release No. 2011-006, Docket Matter No. 37 Concept Release on Auditor Independence and Audit Firm Rotation

Dear Sir/Madam: I am writing on behalf of the Consumer Federation of America (CFA)1 in response to the Board’s request for comments regarding auditor independence and audit firm rotation. CFA has long advocated strengthened standards to improve the independence and quality of public company audits. Our advocacy in this area is founded in the belief that the mandatory audit of public company financial statements only has value to shareholders if it is independent and objective. It is therefore of grave concern to us that both the Board and its international counterparts continue to find evidence, as we do, that auditors do not consistently approach the audit “with the required independence, objectivity and professional skepticism” and that this continues to contribute to significant audit deficiencies. We therefore congratulate the Board for undertaking this examination of the policy reforms, including mandatory auditor rotation, that could be adopted to enhance auditor independence and audit quality.