Auditor Independence Essay

1968 Words 8 Pages
1. Introduction

1.1 The objectives of audit

Under the regulatory, directors are required to produce financial statements annually which give a true and faire view of the affairs of the company and its profit and loss for the period and accountable to shareholders. Auditors have a responsibility to plan and perform the audit to obtain reasonable assurance to the shareholders and other stakeholders of a company on the financial statements.

The objective of an audit of financial statements is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are
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(ii) Independence in appearance - the avoidance of facts and circumstances that are so significant that a reasonable and informed third party would be likely to conclude, weighing all the specific facts and circumstances, that a firm’s, or a member of the audit team’s, integrity, objectivity or professional skepticism has been compromised. (IFAC 290.6)

Many different circumstances, or combinations of circumstances, may be relevant in assessing threats to independence. It is impossible to define every situation that creates threats to independence and to specify the appropriate action. Therefore, this Code establishes a conceptual framework that requires firms and members of audit teams to identify, evaluate, and address threats to independence. The conceptual framework approach assists professional accountants in practice in complying with the ethical requirements in this Code. It accommodates many variations in circumstances that create threats to independence and can deter a professional accountant from concluding that a situation

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