In response to the current, public discussion regarding auditor rotation, Audit Analytics has just released research on auditor tenure, financial officer turnover, and financial reporting trends for the Russell 3000.

Highlights from the research include:

• Both the Russell 1000 and the Russell 2000 companies with auditor tenure of five years or less paid substantially more in audit fees (per million dollars in revenue) than companies with longer tenure.
• 16.1% of Russell 1000 companies have engaged the same auditor for 40 or more years.
• 96.8% of the companies that engaged their auditor for 40+ years also reported audit committee member changes in the last six years.
• Nearly 50% of the Russell 1000 have reported at least one CFO change in the last six years.
• Ineffective ICFRs (SOX 404) for the Russell 1000 have significantly declined, from 8.21% in 2005 down to .83% in 2010. Adverse SOX 302 disclosures have declined in a similar fashion.

Audit Analytics will be providing this research to attendees at the AICPA National Conference on Current SEC and PCAOB Developments, (December 5th - 7th) in Washington, DC. Please stop by our booth for a copy of the report.

Subscribers may also download the report: Auditor Tenure, Financial Officer Turnover, and Financial Reporting Trends.

For more information on our research please email us at info@auditanalytics.com or call (508) 476-7007.

As always, please feel free to contact us with comments or suggestions.