What is the independence of the auditor?
The auditor's independence is the ability of a person to audit so autonomously and integrity. The auditors must be able to objectively review the material and come up with a neutral, accurate and honest report of the outcome of their investigation. When the auditors lack this objectivity, it can endanger the value of the audit and may expose people to risks. Many nations have laws on the independence of the auditor and regulatory agencies can carry out their own audits and investigations if they are concerned. For the auditor, nothing inspires anything to the final conclusion. An important aspect is the ability to decide on the best approach and implementation, as well as to have free access to the necessary materials. In addition, the auditors must be free to write their findings in detail, without the obligation to hide or obscure information.
One of the obstacles for the independence of the auditor is the fact that in most cases the auditors are paid people who audit. This may interfere with objectivity, especially in the case of a large, repeated client. A bad audit could inEst the company to stop using this auditor or could enforce the company from business and auditors is clear reflection to cut off available sources of income. This could lead to the auditor in the process of investigation and reporting less than conscientious. The requirement that the auditors have numerous sources of income can help with this problem ensuring that the loss of the client will not cause the collapse of the audit company.
The independence of the auditor can also be overcast by holding shares in the company or investing in other ways. The auditors must be able to provide evidence of financial independence. If someone who works for an audit company has a conflict of interest, this person must be excused by the project. The presence of someone who has a connection with the company in the audit team can endanger the outcome of the audit and undermine the belief in other audits performed by this company.
independent auditors play an important role in large and small societies, from companies to non -profit organizace. Laws that order the auditor's independence increases consumer and donor confidence by maintaining responsible companies and creating a clear mandate for the use of fully independent, neutral auditors who can provide objective and fair evaluation of their clients.