- independence of auditors
- The fundamental principle that auditors must be, and must be seen to be, independent to enable them to behave with integrity and make objective professional and business judgments. Specific threats to independence include:• an overdependence upon the fees paid by an audit client, especially if fees are overdue;• any family or personal relationship between auditor and client;• any beneficial interest held by the auditor or the staff of the practice in shares or other investments or trusts involving the client;• any loan between an auditor and the client;• any services or hospitality offered by an audit client to the auditors;• any services other than the audit provided by the auditor to the client;for example, an auditor may tender for audits by quoting a low audit fee with the intention of attracting more lucrative consultancy work (so-called lowballing). The independence of the auditor is strengthened by the Companies Act regulation of the qualification of auditors and by conferring certain rights on the auditor. The professional audit bodies give ethical guidance designed to deal with each of the above situations.
Accounting dictionary. 2014.
Look at other dictionaries:
independence — The absence of a relationship, obligation, or *conflict of interest that could comprise an auditor’s judgment. In external auditing, independence can be subverted (or can be perceived to be subverted) by many factors, including the following: (i) … Auditor's dictionary
auditor independence — See independence … Auditor's dictionary
Auditor independence — refers to the independence of the auditor from parties, that have an interest in the financial statements of an entity. It is essentially an attitude of mind characterized by integrity and an objective approach to the audit process. The concept… … Wikipedia
Institute of Internal Auditors — Established in 1941, The Institute of Internal Auditors (IIA) is a guidance setting body. Serving members in 165 countries, The IIA is the internal audit profession s global voice, chief advocate, recognized authority, and principal educator,… … Wikipedia
Court of Auditors — Official emblem … Wikipedia
European Court of Auditors — The European Court of Auditors is the fifth institution of the European Union (EU). It was established in 1975 in Luxembourg to audit the accounts of EU institutions. The Court is composed of one member from each EU member state and its current… … Wikipedia
Institute of Internal Auditors — (Pour IIA decision theory, voir Independence of irrelevant alternatives.) (Désambiguation: voir IIA.) Cette page est la traduction de la page Wikipedia anglaise Etabli en 1941, l Institute of Internal Auditors (IIA) ou Institut des Auditeurs… … Wikipédia en Français
assurance — 1. . A positive declaration on an *audit obj ective. Assurance can cover a wide range of matters, from the *fair presentation of *financial statements to the effective operation of *internal controls. Assurance does not offer the certainty of a… … Auditor's dictionary
audit rotation — The periodic changing of external auditors. Some countries Italy and Spain, for example have traditions of requiring listed corporations to rotate auditors after a defined time period (typically five or seven years) in an attempt to encourage… … Auditor's dictionary
Big Four, the — 1. The Big Four accounting firms are *Deloitte Touche Tohmatsu, *Ernst & Young, *KPMG, and *PricewaterhouseCoopers. These firms are more than merely global accountants and auditors: External auditing is their core activity but they also provide a … Auditor's dictionary