In the wake of the financial crisis, regulators and shareholder activists alike have been revisiting the issue of auditor independence with a view towards requiring companies to periodically rotate their outside audit firms.

The United Brotherhood of Carpenters is filing resolutions for 2012 asking companies to establish a policy that at least every seven years the audit firm rotates off the engagement for a minimum of three years. The Carpenters argue that mandatory auditor rotation would improve the integrity of the audit and ensure the independence of the audit firm’s work.

Three of the targeted companies with early annual meetings—Deere, Hewlett-Packard and Walt Disney—are seeking no-action relief on ordinary business grounds. Although the SEC has historically allowed companies to omit shareholder resolutions limiting auditor tenure, the Commission may take into account whether recent regulatory initiatives have elevated the issue to a policy matter engendering widespread public debate.

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