Ms Karen Erwin:

These are issues that we have looked at and Ms Hall might discuss them in some detail. In essence, taking a pragmatic view and looking at the expectation gap and perceived conflict, any professional firm that is too long associated with the body it is auditing could bring about a suspicion - it may be completely unfounded - that it is getting a bit lazy and relaxed. Therefore, we felt it was better that in time there would be a mandatory rotation. Everybody would know it was there so they would be gearing up to it. A new person on the block would go in and would not really be fettered by previous judgments made either by themselves last year or by the previous audit partner. One would feel almost obliged to support such judgments because one had started down that track. It would, therefore, be a very useful thing to have a brand new, fresh pair of eyes looking at it, and maybe being able to ask what I would describe as a stupid question. They would not take anything for granted but would go in de novo asking "Why do you do that?" That is one side of the equation.

The other side of the equation is the significant experience and expertise that auditors build up by virtue of having audited over a period of time and having built up the relationship with management. If one has new auditors going in too often, one then has an very large quantity of management and audit committee time devoted to the learning curve.

We tried to balance both aspects saying that while change is good, it should be proportionate. We came to a view that there was a three-year learning period and a period of five years where one could use that expertise, but knowing that someone else would be coming in to look over one's shoulder. As a professional person, I know there is nothing that concentrates my mind more than thinking that somebody else will be coming in to examine what I have been doing. We said eight to ten years, therefore, although we are not wedded to either eight or ten.

It is interesting to note that in the Netherlands they have just brought in an agreement for mandatory reporting and have picked eight years. It could have been longer or shorter but we have a sense that it is a good thing, and it is seen to be so. Does Ms Hall want to add to that?