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Essay / Research Paper Abstract
This 10 page paper looks at the issue of auditor independence, looking at how important independence is, including discussing whether or not there is an over emphasis on independence rather than other issues such as quality of work and ethics. The regulation of independence of auditors in Australia is considered are the rules based and principles based approaches which are both present are compared. The bibliography cites 12 sources.
Page Count:
10 pages (~225 words per page)
File: TS14_TEAUaudit.rtf
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Unformatted sample text from the term paper:
Cases such as Enron had a number of underlying causes, with the issue of independence of the auditor being one of the contributory factors. Clarke and Dean (2007) argue that
the reactions of the authorities to the scandals has been misjudged with an over enthusiasm to put more rules. The increase in the level of rules is to try and
control the disclosure of companies and enforce systems of corporate governance with the belief that they are likely to inhibit and prevent the potential for unethical behavior. The problem as
far as Clarke and Dean are concerned is that it is assumed that these rules will have the desired effect with little factual support that the rules will achieve this.
It is easy to see the appeal of introducing new rules, as they give an impression of being more definitive and effective when compared to the former tactics which can
be seen as reflecting a more principles based approach that would help to frustrate malpractice. Highly linked with the shift towards a rules based approach has been popular with
the regulators and the markets is the assumption that there needs a keystone to the approach is to increase and reinforce requirements of independence. Independence in different roles not only
the role of the auditor, but also independence within remuneration and succession committees, as well as the need for independent directors and the independent of appointment of directors. Clarke and
Dean (2007) do not argue that there is not a need for independence, but that there are also other factors which are important and which appear to be overlooked in
the zeal to pursue independence as a holy grail, qualities such as skills, qualifications and experience, which are receiving less attention than the characteristic of independence. There are many
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