What does independence mean in an auditing context? Compare and contrast in fact and in appearance,...

What does independence mean in an auditing context? Compare and contrast in fact and in appearance, and illustrate their differences.

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Answer:

Independence is the most important factor for auditor while auditing. Independence of auditor means that when an auditor conducts an audit he should be free from any such influences and matters causing any such influence which might affect his judgment on the audit. No auditor is allowed to audit a company where he or his partner is an employee of the company or, partner or employee of an employee of the company.

Independence of Fact: The auditor may not perform any audit for a company which they or heir family holds any interest in, be it through employment, shares or relation through marriage to someone who holds employment or shares in that company.

Independence of Appearance: The auditor must maintain a professional distance from employees and stockholders of that company. This means you are not allowed to make friends with people relating to that company or be at risk of taking of the appearance of bias.

ekkarill92 answered 1 year ago

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