Audit Rotation

Jeff Jacobs, our Controller, has given me permission to forward this to Watchdogs, and it is self explanatory. I might add that our present firm specializes in accounting and auditing for the private club industry, and serve 170 such clients in Florida alone.
They provide operating and financial information and ratios for our use that are not available anywhere else.
Mr. Shaw:
You stopped by my office this morning and informed me that a statement which I had made at the recent members forum was being disseminated incorrectly throughout the community. At the members forum one of the questions presented was why the Club would continue to use the same audit firm year after year when many businesses change audit firms every few years. The answer that I provided was that there are indeed certain companies that change audit firms every few years. However, we continue to utilize our current auditing firm McGladery & Pullen for several reasons, with cost being a huge factor. In addition to cost, it was also noted that:
1. Our auditors are extraordinarily familiar with both Countryside and the industry as a whole, and are therefore able to minimize the costs associated with our audit as well as having the knowledge and experience necessary to provide the Club with a truly appropriate opinion.
2. After our audit, we are provided with industry trends that offer insight as to how the Club’s operations can be improved as we can be compared to similar clubs.
A few additional pieces of information that I did not mention that our members need to realize is that our auditors are AICPA certified and truly independent of management and the Club. Also it should be pointed out that there have always been debates within business circles, and government, as to the pros & cons regarding changing firms for audits. One could reasonably discern from reviewing the Sarbanes-Oxley Act that there is not a convincing reason that businesses should regularly change audit firms and that independence can be maintained by virtue of auditor requirements provided within the Act. Finally, it should be noted that a 2003 study revealed that 99% of Fortune 1000 public companies do not have an audit firm rotation policy.
One final item to note is that there are examples of other countries (Spain and Turkey) that have implemented mandatory audit firm rotation laws only to withdraw the requirements as they have been found to be unnecessary as audit independence came at an exorbitant cost.
I hope this helps to clarify to what truly was expressed, as well as providing some additional information on the matter. If you have any questions, please feel free to stop by my office or call to further discuss
Thanks,
Jeff Jacob
Controller