Here is the synopsis of our sample research paper on The Independence of the Auditor. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
It is important that auditors are independent in fact and in the way they are perceived. This 4 page paper considers how this need for independence in managed in the UK. The bibliography cites 4 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEaudind.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
audit. The market relies on the confidence placed in annual accounts and reports (Howells and Bain, 2004). The difficulties caused when market confidence is lost can be seen after the
flare of companies such as Enron and WorldCom were accounts were seen to be misleading. For this there are procedures and standards which are set out by legalisation and regulation
as well as with the membership and statements made by a range of requirements, one of the most important is that the auditor is seen as independent from the company.
The ACCA states that "objectivity may be threatened ort appear to be threatened where by undue dependence on any audit client or
group of clients" (ACCA, 2004). This means that where there is the need to be independent there needs to be the ability of the shareholder or other third party
to be able to accept that the auditors are acting with objectivity. There are many different relationships and links that cause a third party to doubt this independence. In general
terms this means that the company should not in any way have a reliance on the company they are auditing (ACCA, 2004)
There are many ways a reliance or interdependence may be implied, If the auditing company undertake a large level of other complimentary work for the company they may develop
close links, the auditors should not be employees or have family members that are employees of the company. There are also dangers to be perceived if the auditors own shares
in the company they are auditing. However, this is subjective as an auditors owning ?100 worth of shares is unlikely to be unduly influences, but owning ?100,000 of share may
...