auditor rotation

Auditor rotation is a policy that requires companies to change their external auditors, or accounting firms, periodically—often every few years. This practice aims to promote independence and objectivity by preventing auditors from becoming too familiar with the company’s management or overly involved in its affairs. Regular rotation helps ensure that the financial statements are reviewed with fresh eyes, reducing the risk of biased or complacent auditing. Ultimately, it enhances trust and transparency in a company's financial reporting, giving stakeholders confidence that the company's financial health is accurately assessed.