Independence Between Auditor and Client:

Independence Between Auditor and Client: Auditor independence is largely regarded as the cornerstone of the auditing profession because it's the basis for public trust in the proof function. The independence of an auditor is guaranteed if he/she is has the capability of making free audit decisions. In this case, these auditors have the ability to make such decisions despite of perceived lack of autonomy and if they are in a potentially compromising situation.

On the other hand, there is need for independence of clients during the financial statement audit engagements. The clients should be free to evaluate information on the financial statement objectively without influence from the auditor. Generally, auditor independence is used to promote and support reliance on the financial reporting process. Auditor Independence: As the cornerstone of the auditing profession, the independence of an auditor is vital in ensuring that these professionals present unbiased audit decisions.

Independence is a word commonly used in accounting in conjunction with services offered by auditors and certified accountants to their clients. The most common services provided by external auditors that need independence include auditing internal control over financial reporting, financial statements, and confirming the management affirmations of internal control over financial reporting.

The independence of an auditor can be classified into two categories as explained below & #8230; Independence of Mind: This kind of independence enables the professional to perform his/her services without any influence that compromise his/her professional judgment. As a result, the independence of mind allows auditors exercise objectivity, professional skepticism, and to act with integrity (Greene, 2008).

Independence in Appearance: This category of independence basically entails avoidance of situations that could make a reasonable and informed third party with relevant information to logically conclude that the objectivity, integrity, or professional skepticism of the auditor has been compromised. Client Independence: The independence of the audit client is needed not only during the engagement period but also the period of the entire financial statements.

This financial statement audit engagements normally begin when the audit team starts to conduct the auditing services and ends when the audit report has been presented. In cases with financial engagements of a recurring nature, the period ends through a later notification by either party of the termination of the relationship or the submission of a final audit report. It's important to note that the audit client can be a firm involved in the financial statement audit engagement.

Similar to individual clients, these clients are also required to have independence through which they can freely express opinions in the process. Any threats to independence of the client can be determined on whether threats are created by past services from the client or business relationships before the audit engagement.

Importance of Independence of Auditor and Client: During financial statement engagements, the independence of auditors and clients is important because of the following reasons & #8230; Lesser Inappropriateness: The closer the relationship between an auditor and his/her client is the higher the probability and perception of inappropriateness. Through an examination of various studies and the wider implications of such relationship, the independence between auditor and client is the most effective way of lessening inappropriateness. This is primarily because such independence promotes and sustains integrity during the financial statement audit engagements.

Promotion of Reliability: The main goal of independence between auditor and client during audit engagements is to promote reliability through providing an independent and objective view of the financial statements. The independence of the auditor assists in ensuring quality audits and contributes to reliability of the client's or user's financial statements on the financial reporting process. Reliability of the audit process is promoted because auditors have the ability to render unbiased audit decisions while clients evaluate the statements freely.

The result of such initiatives is promotion of user reliance on the audit process and enhancing the efficiency of the capital market (Lindberg & Beck, 2002). The financial position of an audit client is largely determined by an efficient and reliable audited financial statement. Confidence of the Audit Client: As independence between the two.