Auditor Maintains a Professional Independence

¶ … auditor maintains a professional independence when working with their clients in issues concerning the assurance of the financial statements. Indeed all businesses want to realize the best bottom line whenever they produce their financial statements by striving to make them appear as attractive as possible for various reasons. In most cases the attractiveness is intended for the end users of the various financial statement.

Mautz and Sharaf (1961) noted that auditor independence is the very cornerstone of auditing as a profession. Auditor independence is therefore noted to be a crucial element in the corporate reporting process. It also acts as a critical prerequisite for the addition of value to the financial statements that have been audited. The recent accounting scandal involving big corporations like Enron in the U.S. have obviously cast doubt over the concept of auditor independence as well as the very value of auditing. As Louwers et al. (2011) noted, one of the main elements of financial assurance services is the maintenance of independence. Auditors therefore strive to maintain a high level of integrity whenever they are providing the assurance services.

The meaning and need of auditor independence

Independence is an essential feature of audit and therefore if an accountant works and audits himself, this in actual sense cannot be considered an audit since it lack independence. The AACA Code of Ethics clearly defines independence as comprising of independence of both mind and appearance.

The importance of independence in regard to the provision of financial assurance services cannot be overemphasized. The value of audit is therefore noted to be derived wholly from its independence. Without the concept of independence, the auditors are noted to lack both credibility and opinion. The nature of relationship that exists between a client and an auditor is by itself a threat to the concept of independence. Incidents of influencing the auditor reports on the financial position of clients have been noted to result due to conflict of interest. The possibilities of a conflict of interest existing between clients and firms are noted to exist. Various connections such as audit firms being associated with other firms, personal as well as family relationships, client's financial interests, employment with the audit firms as well as the provision of various non-audit services to the audit clients are noted to affect the independence of auditors. Strength in character is therefore necessary in order to enable the auditors to have independence in their opinions.