Why is auditor independence so essential? What is professional scepticism and why is it important to...

Why is auditor independence so essential? What is professional scepticism and why is it important to auditors?

Expert Solution

The purpose of audit is to express an opinion on the truth & Fairness of Financial statements.for this auditor independence is necessary. auditor independence is necessary so that auditor's opinion can be impartial, unbiased and free from any undue influence. the auditor should not be influenced by others. many stakeholders placed reliance on the auditor,s opinion like an employee, shareholders, govt, and banks, etc and to avoid any conflict of interest auditors independence necessary

professional skepticism:-. professional skepticism is an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error and fraud. professional skepticism means enhancing the auditor's ability to identify the risk of material misstatements and respond to the risk identified.

professional skepticism necessary to reduce risk material misstatement at a low level. professional skepticism mainly necessary in which management decisions & judgment involve for example accounting estimate, going concerned. of the entity and related party transactions.

ekkarill92 answered 2 years ago

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