Final answer:
The false statement is that the rules for mandatory partner rotation and audit firm rotation are the same internationally; in fact, these rules vary by country. The issues around rotation involve the familiarity threat, which might affect objectivity, but long-term relationships can improve audit quality.
Step-by-step explanation:
The statement that is false regarding partner rotation and audit firm rotation is: b. Rules are the same internationally regarding the terms of mandatory partner rotation and mandatory audit firm rotation. Regulations regarding mandatory rotation of audit partners and audit firms can vary significantly from one country to another. Certain aspects of rotation are subject to local laws and professional guidelines, which means that there isn't a universal set of rules that applies to every country.
The familiarity threat relates to the concern that the longer an audit partner or firm remains with a client, the more likely they are to become too sympathetic to the client's interests, potentially compromising their objectivity and independence. On the other hand, a longstanding relationship can enhance audit quality due to the in-depth understanding of the client's business and industry. However, a cooling off period is generally enforced to address the familiarity threat, during which time the individual or firm is prohibited from performing significant audit-related duties for the client.