If Franin Financial CORPORATION Richard

Mandatory auditor rotation is designed to increase auditor independence. However, there already exist substantial regulations that ensure auditor independence, such as mandatory audit partner rotation, requiring auditor selection and supervision by audit committees consisting of independent directors, and limitations on the non-audit fees audit firms receive from the companies they audit. Many of these requirements were adopted in response to the dramatic audit failures involving Enron, WorldCom and others that contributed to an economic recession. In contrast, the most recent economic downturn has not been attributed to significant audit failures, suggesting that existing regulations are