Essays on Auditor Independence - Doria etusivu.
Auditor independence is commonly referred to as the cornerstone of the auditing profession since it is the foundation of the public's trust in the accounting profession. Since 2000, a wave of high-profile accounting scandals have cast the profession into the limelight, negatively affecting the public perception of auditor independence.
Auditor independence refers to the independence of the external auditor. It is characterised by integrity and an objective approach to the audit process. The concept requires the auditor to carry out his or her work freely and in an objective manner.
This was caused by reckless spending by corporations in the late 1920s (Kim, Nofsinger, Mohr, 2010a). However in recent times it has become even more important after a number of firms have become bankrupt due to fictitious accounting methods, the most infamous one being the Enron scandal of 2001.
Introduction. The concept of independence occurs at several points in the Strategic Business Leader (SBL) Study Guide.It is listed as one of the key underpinnings of corporate governance in Section B5, it is a crucial quality possessed by both internal and external auditors (Sections F2), and it is included in Section A3 as an ethical quality.
By:- shubham kanchhal Auditor independence refers to the independence of the auditor from parties that may have a financial interest in business being audited. Independence requires integrity and an objective approach for the audit process. This concept requires the auditor to carry his work freely and in an objective manner. The purpose of an audit to enhance the credibility of a financial.
An effective audit exercise calls for audit independence. In the late 19th and in the beginning of the 20th centuries, the concept of auditr indepnce experienced soem changed. When the SEC was establssiedh, it stressed on the creation fo staradrs for auditing and financial repoiritng. Conseqwunelty, aautors independce model shifted in favour of nuietrality and objectivity in reporting. The.
The second essay investigates auditor independence in China throughout the period from 2003 to 2014. It uses the propensity to issue a modified auditor opinion (MAO) as a surrogate for auditor independence. Using a sample of 1,826 Chinese listed firms, I report a negative impact of state influence on auditor independence. The results also show.