Today, U.S. Rep. Ed Perlmutter (CO-07) defended the concept of independent auditing today at a House Financial Services Capital Markets subcommittee hearing.

The subcommittee is considering a draft bill sponsored by Representative Michael Fitzpatrick, which would prohibit the Public Company Accounting Oversight Board (PCAOB) charged with overseeing auditor independence, from requiring larger corporations to periodically change the outside auditing firms they hire to examine their books.

Proponents of auditor rotation argue it helps ensure the relationship between a company and its auditor doesn’t become too cozy, and rotation encourages a healthy skepticism on the part of auditors which enhances investor protection. 

Perlmutter makes the point that gains made by a rebounding stock market are better conserved by regulations aimed at ensuring the integrity and independence of corporate auditing.

Click here to watch the video.

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