Importance of Auditor's Independnce

Essay on the importance of the auditor's independence.

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  • Granton Munyao
    Granton Munyao
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    $20.00
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    ** * ******* ** ************* *** the ********* ** *** ********* of ********* information **** process is ********** ** *********** *** *** *********** ** *** ******** ** *** ********* *********** ** the ************ ** ******** and *** party that ***** **** *** *********** ** ************ ********* ***** ******** ****** an ********** ********* framework **** provides * set ** ********** *** *********** ** regulatory bodies to ******* *** ********* *********** ******** *** ******** ** ******* *** *********** is ******** or **** ***

    *************

    ********* Standards **** *** **** ** *** ********* ******* *** *** Generally Accepted ********** Principles **** *** ****** made *** individual ********* ******* ************ refers to ******** *** *********** a firm’s ******* and **** conclusions ***** on the ****** *********** ******* *** **** ** prejudice The ******* ********* ** ** ******* ** ** ******* *** *********** of financial ********** ** accordance **** *** *********** ******** ** the ********** body *** reduce *** **** ** ********** ** *** investors and ************ ***** are various types of ******** ********** ******** review ********* *********** of ******* agencies ******** auditors examine *** ******** *** ********** ** * **** *** are employed by *** firm in question ***** external ** *********** ******** *** *** ******** ** *** ************ ** ******** (Megh 2013) ****** are

    *********

    ***** on ***** justifications ******* *** insurance hypothesis ***** states that audits ******* ********* ** ************ ******* **** *** recover ***** *********** **** *********** *** ********* auditors *** *********** hypothesis **** ****** **** decision ****** **** ** the information ******** by ****** ******* ***** ** the ****** ****** **** ****** that managers ****** ** ******* ** *** *********** ******* ********* ********* ***** This ***** will ******* *** ********** ** ******** ************ *********** auditors ***** ***** *** they *** **** preferred ** ************ in ********** ** internal ******** and how ******* ***** ** ******** *** ***** *** ****** the ************ ** *** ******* **** ***** will also ******** *** requirements of *** ************* Standard of ******** ***** and *** International ********** ** *********** ****** **** of ******* ********** ** auditor

    *************

    As ********* ***** *****

    ***

    three types ** ******** **** *** ******** auditors ******** auditors *** ********** ******** ******** auditors *** ***** by ******* *** are ****** ** benefit **** the *********** ******** ** *** ***** **** ************ *** investors ********* *********** ******** ******* *** ********* records ** a ******* **** he/she is *** affiliated **** The ******* ********* ** independent auditors ** ** ******* valid information to the stakeholders *** reduce ***** ********** **** by limiting ********** ******** **** could lead ** loss of investments ******* ***** ******** auditors *** ********* to ******** auditors because **** **** ** *********** with the ******* in question and the *********** ******** **** be unbiased Internal ******** *** ****** ** be ****** because **** *** hired ** *** business *** ********* *** affiliated Another ********* ** ******** ********

    **

    **** they ******** *** ******** ********** of *** ******** **** *** lead to *** ******* ** *** ******** and ********** ****** the ******************* ********* ************ **** **** external audits ** more ******** **** ******** ****** (Stirbu ** al 2009) External ******** **** credibility to ********* ******* ******** ** *** ******* *** reduce *** risk ** ********** ******* **** as ***** *** other financial ************ also prefer ** **** ******** ******** examine *** financial ******* of *** ********** **** allows the lenders to ******** *** company’s cash ***** and ******** *** estimate ******* *** **** about *** ********* ****** *** *** back *** ***** in *** ***** period ******** ******** **** ****** legal *** tax ************ caused ** ********** behavior ** *** ********** ** *** ************ ** a *** ** sway **** investors ***** *** and appease ******** ********* then *** ********** *** ********** ******* *** ****** losses **** is against the law *** ********* *** company *** face **** tax ***** **** *** ******** ****** ******* the ********* ** ******* ******** ****** ***** sure that *** ******** ** not ****************** *** books ******** ****** **** ******* from *** services offered ** ******** ******** in decision ****** *** information provided by ******** ******** ***** business ****** ******** ********** errors *** ********* **** **** ********* decisions (Verschoor ***** ******** auditors *** **** ******* and ******** ***** trends; **** ***** *** ******** ***** ** plan *** ******** future ***** ****** The ************ ********* ******* *** ******** valid in ********* with *** *** ********** ** *** relevant ********** ****** ie **** *** GAAP *** Requirements ** ISA ************* Standards **

    Auditing

    (ISA) *** *

    ***

    ** ********** *** *********** for *** ********* ******** ** ********* *********** ******** ** the ************* Auditing and Assurance ********* ***** ******* ********* ** the *** *** auditor ***** internal *** ********* ** ********* ** ******* ************ namely; ******* ************ ************ ********** *** ************ ******** ***** ***** ***** ******* ************ consist of ********* *********** ************ ********** confidentiality and ************ behavior ** auditor ** ******** ** **** ********* ** that ** She ****** ** ****** *** ******** * ************ ************ **** the ************ Auditors *** **** expected ** ** ******** *** ********* **** ***** that *** ******* should *** show favoritism ** * ********** **** ** * department *** third ethical *********** ** ************ ********** ********* ** *** ********* skills and ********** **** *** auditor **** ******* ** ** ** do the *** *********** *** *************** ****** requires the ******* use *** *********** ******** **** *** ******* involved and not ***** ******* ** *** ********** gains The last ******* *********** ** ************ ******** ****** **** the ******* ****** maintain *************** throughout *** **** ***** *********** **** ***** ** ***** *** *** ************ ***** ************ Skepticism *** ******* is ******** to

    be

    alert ** ********* factors involved ** ********* **** ******** *** ********* ********** of ********** ******** ********** information *** ********* ******* ********* ***** This ***** sure **** *** ******* ** keen *** **** *** ******** *** unusual ************* *** *********** **** and current ************ ******** ******** *** auditor ** ****** ******** and efficient to ***** * conclusion *** ******* ** also ******** to **** ***** of *** *********** ******** *** the ***** report **** helps the ******* involved ******** problem ***** with *** information ******** *** *** ***** ****** made ***** ** **** ************ ******* ** ******* Independence ********* ** Parker (2015) ****

    ************

    ******** *** caused **

    ***********

    threat ** ***** ***** *** ******* ** working ******* **** the ********** ********** **** ******* the auditor **** ****** *********** evaluations and conclusions ******* ****** to ******* independence is ************* **** ****** ** *** auditor’s ******** ** *** *** information to ******* him *** ******* an ******* **** **** *** client *** ****** *** to ***** *********** **** *** ***** *** ******** ***** ** as *** ** lose the ****** *********** ** also * threat ** ******* ************* ** auditor is likely ** ** biased ** ****** *** worked for *** ******* ****** ** *** *** * ************ **** *** firm Depending ** *** relationship the ******* *** ********** *********** ** ******* *** *************** ******** ** a ******** or ******** ***** ****** 2012) *** auditor may ****** to overlook vital *********** ******* ** familiarity An auditor *** **** ***** ********* ****** ** *** **** ***** **** ** * ******** ** interest **** ***** ** ***** *** ******* dependence *** ***** threat to ******* independence is ********* threat **** ****** **** *** ******* *** * ************ ** ******** ************ with *** ******* *** its ********* A business ************ ***** **** ***** ******** ***** while *********** **** *** ********** ********* ***** ** ****** ****** Codes of ****** ** IFAC regarding auditor’s ************* According ** ****

    *

    code ** ****** *** **** *********** ** **

    to

    enhance ******* ************ and ******* ******* behavior ***** codes are based ** several ********** such as ********* *********** *************** *************** and ************ behavior An ******* is obligated ** ** *************** in *** ************ ************ *** ******** relationships Objectivity in **** case ****** ** *** *************** ******* ** **** **** ********* ******* ******** ** ******** *** ***** ********* (EC ***** 2011) *** care *** professional ********** obligate *** auditor to **** ********** ********* *** ********** ** the field **** *** be **** ** ******* ACCA ************* *** ******* ** **** ********* to perform the auditing ** *********** provided **

    the

    *********** regulatory body *************** ****** to the *************** ******* ** **** *** *********** ******** ** *** relevant ******* *** not disclosed ** ***** ******* ****** ********** ** do ** ** **** * regulatory body is ** **** of the *********** *** ******* ************** ************ behavior ******* *** ******* to ****** **** the *********** *** **** *** information *** ** ******** ** *** relevant framework *** ********* **** as GAAP ** ** **** sure the firms records *** in ****** *********** ******** is justified ******* the *********** ******** ** ******* ** the ******* involved

    ***

    may

    ****

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    investments

    *** the ******* *********** of *** ******** ** ** **** * fact **** management ****** be ******* ** use the ********* ** *** **** *********** ******** ********* *** ** a ******** and ***** *** discrepancies **** *** ** made by *** ********** ** ** ********* ******* **** *** ******* ** ******** show no ********** *** ***** ** ********* report ******* independence ****** to *** ******************** ******* ** investigate enterprise’s ********* reports without bias This is ********* ******* ** provides stakeholders *** the ******** ******* **** ***** *********** **** **** can *** ** ****** **** in *** ******** *** **** ********* ********* Independent ******** **** helps the business ****** ******** problem areas *** fix **** in time ****** ***** *** tax implications ***** ********* to IFAC *** ISA ** ******* **** ** ******* **** knowledge ** *** ***** **** ************ ********** *** provide *********** ******** to ***** *** ******** ** *** ***** ****** Factors **** *********** ********* *** *************** **** **** put ** ***** to ********* *** ******* ** ******** ************ and reach a ***** *********** *********** ******** * 2013 ***** ***** *** Differences ********* ********* *** http://wwwaatborg/files/Audit%20Types%20presentation%20-%20Sue%20Brewsterpdf ********* 14 ***** ****** ** *****

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    125137995 Importance of Auditor Independence.docx

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