Auditor rotation has long been discussed as a tool to solidify auditor independence, though it comes with the offsetting factor that it undermines auditor learning effects coming from client experience. In this paper, we consider a model that introduces new considerations in auditor assignment. In the model, managerial incentives tied to a concern for higher market price give rise to a temptation to manage earnings but also engender incentives for managerial effort. In this framework, an effective audit serves to reduce manipulation and also to solidify managerial effort incentives. These features jointly point to a new justification for auditor rotation – when a skilled auditor issues a report for a firm, the report updates market beliefs sufficiently that the firm’s reputation is solidified and marginal incentive benefits of a follow-up audit in a subsequent period are reduced. This means that a strong audit has decreasing intertemporal returns within a firm and, as such, rotation helps “share the wealth” of the real effects of effective audits across an economy. As a result, rotation not only reduces earnings manipulation but also introduces positive real effects that manifest in higher market capitalization.