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Envalue the Auditor Independence Provisions - Essay Example
Finance & Accounting
Pages 5 (1255 words)
The purpose of this essay is to discuss the theoretical framework associated with auditor’s independence, code of conduct and ethics, which is based on the FEE Paper Comparison International Ethics Standards Board for Accountants (IESBA) Code of Ethics…
This essay summarises the concepts, that are used today in the legal regulatory framework, and identifies the conceptual framework of auditor’s independence. Apart from this the regulations for auditor independence that also are discussed in the essay by the researcher, with respect to European Union, as this will assist in analysing how the auditors can keep their personal interest aside and focus towards an unbiased and flawless audit report. Audit firms and auditor must maintain their independence for the reports of the auditors to be free from any external, personal and organisational impairment. There are various ideas and assumptions present regarding the future development of auditing in context of independence. In US the audit control procedure states that the audit reports should be reviewed by another company once in three years. The researcher mentiones that this essay discussed all those factors which were enough to discuss how auditors can keep aside their personal objectives and interests in order to support the quotes that have been mentioned at the beginning of this study. Auditors today are like examiners who check the annual performance of the companies in order to assist them in forecasting and decisions making. However, the researcher also concluds that if code of ethics and laws are not followed, then companies would function on wrong guidelines, and there are many examples that can be drawn from the recent financial crisis to describe how faulty judgement can lead to bankruptcy. ...
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