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The Role of Safeguards in Strengthening Independence
Finance & Accounting
Pages 4 (1004 words)
Role of Safeguards In Strengthening Independence Name ID Table of Contents Introduction 3 Independence 3 Safeguards 4 Absolute Prohibition 4 Permitting But Restricting the Extent 4 Permitting and Requiring Policies to Mitigate Threat 5 Permitting and Disclosing 5 Other Measures 5 Peer Review 6 Enhancing Internal Controls 6 Internal Audit Committee 6 Conclusion 7 References 8 Role of Safeguards In Strengthening Independence Introduction The independence of the auditors is one of the major concerns for ensuring quality audit services.
However as the client is paying the auditors, thus the sheer freedom of the auditors cannot be absolute. The importance of autonomy of auditors and the inherent risk of not being totally self-determining raises many of the issues where safeguards where suggested in order to minimize the threat to the sovereignty of the auditors. Although auditors cannot be completely liberated from the client however there are certain measures, which brings the dependency of the auditors to an acceptable level. Independence Independence of the auditors is compulsory in order to assure that the opinion that auditor provide is free from biases. Auditors provide reasonable assurance upon the financial statements of the company where the auditor expresses the opinion whether the financial statements are free from material misstatement and all applicable standards were followed (Cai, 1997). The assurance regarding the independence of auditors must be affirmed, though not completely but to an acceptable level (Silvia, 2010), by providing safeguards upon the issues that threatens the auditors’ independence. ...
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