the external auditor is to protect the interest of the public. To achieve this, it is important for the public to trust and have confidence in the work of an auditor. It is crucial that auditors appear independent to the public in both fact and appearance. For this reason, it is the auditor’s responsibility to ensure that there are no personal or business relationships with anyone in a position of influence within the firm they are auditing. Even though the personality of the auditor might allow him
The Importance of External Auditor’s Independence According to Gillespie, Lewis and Hamilton (2004:221) an audit is: “a scrutiny of the accounts by a qualified auditor who carries out checks on the figures so as to establish whether the accounts show a true and fair view of the results and the financial position of the entity.” According to Wikipedia (2011a), auditor independence refers to “an attitude of mind characterized by integrity and an objective approach to the audit process”. Independent
Reda Worked With: Ibtihal Slassi Fall 2013 1- Auditor independence refers to the disinterest from the internal and external parties that could influence the professional judgment of an auditor. In other words, auditor independence is the lack of any interest that may create a threat or a risk of material bias regarding the reliability of the financial statement. Furthermore, the main aim of auditor independence is to improve the consistency and the reliability of information that
Over the years, regulators and practitioners raise concerns on auditor independence. The Sarbanes-Oxley Act of 2002 includes rules on auditor responsibility and independence. The PCAOB designed policies on auditors’ ethical behavior and independence. The AICPA Code of Professional Conduct contains Section 101 – Independence that describes requirements for the auditor during engagements. The regulators establish principles and standards of the accounting profession, but the number of financial scandals
WHY IS AUDITOR INDEPENDENCE SO IMPORTANT? Auditing is the efficient critical examination done by one person or group of people’s independent from the system audited. To do an audit, confirmed information must be present and some standards by which the auditor can evaluate the information. Another is gathering and evaluating any information to determine whether the information being audited is identified in accordance with establish criteria to satisfy the purpose of the audit and also auditors must
Audit Independence Assessment Item 02 –Q1 Author- I U Amarasiriwardhana Abstract This report discusses importance of auditor independence nowadays and how statutory, regulatory & code of ethics has been involved in enhancing it and how non-audit services impair the independence of auditors. Table of contents 1.0 Introduction 2.0 Why Independence Important for auditors 3.0 How enhanced auditors independence 4.0 Non-audit services provided by the auditor to their audit client. 5.0 What are the arrangements
Independence Auditor Independence. This case can also be used to discuss auditor independence. Auditor independence has received significant attention in the U.S. Walter Schuetze, then Chief Accountant to the Securities and Exchange Commission (SEC), wrote a pointed commentary, “A Mountain or a Molehill?” Several other SEC speeches and commentaries followed until November 2000 when the SEC adopted new rules governing the auditor’s independence. The amendments modernize the Commission’s rules for
reassuring senior management about the internal audit department’s independence and objectivity. I have provided detail on consideration of independence and objectivity, based on guidance from the International Institute of Internal Auditors (IIA). I have also charted steps should taken by TechNet to ensure the internal audit department’s independence and objectivity. The Institute of internal Auditors (IIA) defines independence as “the freedom from conditions that threaten the ability of the internal
al. indicated that the incumbent auditor on this study perceived that the management’s decision to switch audit firm has been done and the motivation of the issuance of RFP possibly because of the incumbent auditor’s has more local long term relationship with the board and the audit committee than the management (p.878). Fiolleau et al. observed that auditors going in for client acquisition as a business activity, instead of an expert service one and that auditor is determined to winning the client
external auditors to be independent? Relate your answer to the primary role of external auditors? By Zachariah Godfrey-Plews This essay has asked me to look at the importance of external auditors and why it is vital for them to remain independent. I will try and look at the many ways of the advantages of independent auditing from different perspectives for example the company itself, the general public and the state. I think it is important to first define what an audit and an external auditor to be