Independence: 2 Problems With Auditors Objectivity And Independence

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2 Problems with Auditors Objectivity and Independence
The fundamental principle that requires the professional accountants to behave with professional integrity in their business relationships with clients, which sometimes they struggle and make great efforts to maintain their objectivity in their professional and business judgments. Objectivity is a mindset of professional accountants and on certain occasions, to preserve the objectivity professional accountants have to maintain an independent approach from those factors that can influence and impair objectivity. Independence requires independence of mind and independence in appearance. Not only by maintaining an independence of mind which is, not to be affected by the influences that can compromise the judgment and the integrity of the professional accountant, but he has to maintain an independence in appearance as well,
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Arthur Andersen charged the client a huge sum on fee, 52 million dollars for the audit and the non-audit services provided to the client. Initial allegations focused on the role of the auditors, AA was one of the big five accounting firms in the united states at that time and served Enron for nearly 16 years. The courts documents stated that Enron and Arthur Anderson allegedly categorized hundreds of millions of dollars as increase in the shareholders equity, and hence misrepresented the true credibility of Enron financial statements. Arthur Anderson gig not follow the GAAP principles, and later on was also accused of destroying the records that was not on the physical but computer files and emails. Being proven guilty of after a 6 weeks trail, Arthur Andersen surrendered its accountancy license and were fine 500,000

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