Erik Gerding notes that:
On Thursday, I travelled to Houston and gave a statement before the Public Company Accounting Oversight Board in a roundtable hearing, as the PCAOB considers whether to impose a mandatory auditor rotation rule. In using its new inspection powers, the PCAOB has found worrying evidence of auditors compromising their independence, objectivity, and professional skepticism (see the PCAOB’s concept release soliciting public feedback).
This problem and whether mandatory auditor rotation is an appropriate solution present a bramble bush of questions that have solicited a great deal of comments (you can see the statements at the Houston roundtable (including my own) here); the PCAOB also held roundtables previously inWashington, D.C. and San Francisco).
Gerding then proceeds to review the state of the art in legal scholarship on the foundational question of whether true auditor independence can ever be achieved. It's a very good summary, which I recommend highly. (FWIW, I tend to come down on Bill Bratton's side of the debate.)
In any case, I don't see how mandatory auditor rotation can work in an environment in which there are only 4 big accounting firms. Because most public companies get a variety of non-audit services from one or more of the Big 4, as well as having another as their independent auditor, mandatory rotation will create huge conflict of interests.