That is true to a certain extend. The big four accounting firms probably been serving the same clients for decades. They probably change the accountants every so many years. The company that left Sadler (Cirtran corp) had been with them since 2013.
What Is the Sarbanes-Oxley Act?
The act prevents conflicts of interest when an outside auditor audits a company. Under the act, auditors cannot provide other services for the same client when they provide that client with auditing services. Furthermore, the act calls for audit partner rotating and sets standards for auditor reporting.
The fact that public companies must rotate engagement partners every five years, as mandated by the Sarbanes-Oxley Act, sometimes plays a role in the decision-making process. “If a company knows the five-year rotation period is coming up, they’ll look to see what the other firms have to offer,” says Trent Gazzaway, Grant Thornton’s national managing partner of quality and innovation for audit services.
The Public Company Accounting Oversight Board (PCAOB) recently requested comment on whether audit firm rotation would improve the quality of audits. Currently, public companies are required to rotate engagement partners every five years; there is no requirement in the U.S. to rotate audit firms. While non public companies and non-profit organizations are not required to rotate audit firms or audit engagement partners, they need to think about the quality of their audits.
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