Member

On Amendment 248, independence and objectivity are integral to an effective audit system. I agree that prolonged relationships between individual auditors and bodies could introduce issues. That said, it is not necessary or desirable to add a 10-year rotation requirement into primary legislation. As is the case currently, other mechanisms will provide the appropriate safeguards. Clause 76 will give the local audit office responsibility for contracting and appointing auditors for local authorities, as well as other local bodies such as police and fire authorities. With oversight across the system, the LAO will be well placed to implement an approach that encourages stable and constructive auditor-body relationships while also mitigating the potential risks of long-standing engagements. These considerations will, for example, be relevant to how the LAO agrees and manages audit contracts, appoints audit providers to bodies and determines the length of appointments. All local auditors, as now, will need to comply with auditing standards set by the code of audit practice, including requirements regarding independence and objectivity. The current code also requires auditors to comply with separate ethical standards to ensure integrity, independence and objectivity. These make it clear that engagement partner rotation is vital.