Working individually present an essay discussion on the following topic.

“In 1985, Congressman Richard Shelby asked on the floor of the House of Representatives, “How can an audit firm remain independent…when it has established long-term personal and professional relationships with a company by auditing that company for many years, some 10, 20 or 30 years?”

B Arel, R Brody and K Pany, Audit Firm Rotation and Audit Quality, in CPA Journal, 75(1), 36-39.

Required:
Critically discuss the problems that arise or that are perceived to arise from companies retaining the same auditors for long periods of time and the advantages and disadvantages of the solutions proposed to resolve these problems.

Questions that need to be addressed in your essay include:
• The reasons why commentators, interested parties and politicians are suggesting that lengthy audit tenure is such a problem
• The proposed solutions to these problems
• Arguments in favour of the proposed solutions
• Arguments against the proposed solutions

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