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Can the Auditor Ever Attain Perfect Independence?

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Submitted By Hesitate
Words 1295
Pages 6
Topic: Can the auditor ever attain perfect independence? Is it economical and practical to achieve and, if not, should the government should be handling auditing or be part of the audit process?

My paper shall be addressing the issues revolving around auditor independence.
Auditor independence is defined as the reference to the independence of internal or external auditors from parties that might have a financial interest in the business being audited. Independence involves two forms, independence of mind and independence in appearance. Independence in mind is being independent in actuality and while independent in appearance is being independent to the perspectives of the public. Auditors require independence as they must be objectively unbiased when providing attestation services to their clients, so that the financial statements they audit would be trusted by the stakeholders who would be using them. Without unquestioned independence, audits have little value. ( Karla M. Johnstone, 2000)
Auditor independence depends on whether the auditor is able to be free from all economic, financial and other relationships related to the client. The more unrelated, the better. However, as members of the society, it would be difficult to be completely free of relationships with others. More significantly, the fact that the client pays for the audit fee puts the biggest strain on independence, especially so when the client represents a large percentage of an auditor’s total billings.
Thus, the auditor’s dilemma. The auditor would be pressed to pass an unqualified opinion for the client as he would be likely to want to please the client so that they would resume engaging them in the future and also to create a better impression on the client so that he might get employed by the client in the future. However, the auditor would have to be objective and impartial towards to

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