![]() This is discussed later in relation to the appearance of independence. There has also been an excellent foundation, at least for a conceptual framework, for several decades. The official definition of audit independence equates the term with an attitude and approach of objectivity (being unbiased, fair, and impartial) and integrity (being intellectually honest). The second general standard on independence requires that the auditor "must be without bias with respect to the client since otherwise he would lack that impartiality necessary for the dependability of his findings, however excellent his technical proficiency may be." AU section 220 also states that independence requires "intellectual honesty" and a "judicial impartiality that recognizes an obligation for fairness not only to management and owners of a business but also to creditors and those who may otherwise rely (in part, at least) upon the independent auditor's report, as in the case of prospective owners or creditors." Essentially the same definition exists today in AU section 220 of the AICPA's codification of auditing standards. There has been an official definition of audit independence since Generally Accepted Auditing Standards were first proposed in 1947 ( Tentative Statement of Auditing Standards-Their Generally Accepted Significance and Scope ). To that end, I accept Elliott and Jacobson's challenge on behalf of all those who do revere the profession's history.Įlliott and Jacobson assert that there has never been an official definition of the term independence and that there has never been a conceptual framework for audit independence. While reexamination of historically held views on any topic is usually necessary for progress, it is important to make sure those views are understood before considering discarding them. Those who revere the profession's history may find the admission difficult, but it would be in the best traditions of independence. It is unlikely that a conceptual framework worthy of the profession's heritage will emerge without a frank admission that past independence concepts-to the extent they existed at all-left much to be desired. Jacobson throw out a challenge to those unwilling to engage in wholesale abandonment of existing concepts of audit independence. * The wisdom of viewing integrity, objectivity, and independence as mutually exclusive qualities.Ī t the close of "Audit Independence Concepts" ( The CPA Journal, December 1998), Robert K. * The appropriateness of regulating the appearance of independence, and * The effect of appearance of independence on information risk, ![]() ![]() The author presents contrary views on the following points raised by Elliott and Jacobson: Jacobson presented their versions of the objective, definition, and principles of audit independence. Several articles on the subject of audit independence have appeared in The CPA Journal. In Search of Concepts of Auditor IndependenceĪ blueprint that builds on the old In Search of Concepts of Auditor Independence ![]()
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